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Last Updated:[02-12-2013 01:13:07 EDT] Zoom in Zoom out Back to Tradenews

Russia backed Customs Union eyes the EU

tradenews Looks like the current trade behemoths, the European Union and United States are getting an evenly matched adversary soon. The free trade zone, backed by Russia is expanding its borders, bringing together the citizens of three former Soviet countries- Belarus, Russia and Kazakhstan to work legally in the territory of one another’s countries. This is a momentous social, economic and bilateral step that is sure to strengthen the region and bring in free impetus to new trade. What’s more, a number of other ex-Soviet states have expressed a strong interest to join this free trade agreement.

Russia has been working towards a trade pact such as this for long- holding bilateral meetings and extending support for countries that have shown a flicker of interest. Thankfully, all the hard effort is finally paying off- aside from the three confirmed members, Ukraine, Kyrgyzstan and Armenia have strongly committed to joining in the near future. A trade zone such as the one envisioned allows Russia a preferential economic advantage, allowing its goods to flow across the borders without encountering any impositions or taxes, also allowing Russians to occupy professional positions in these member countries. However, the same advantages are extended to the other members of this pact too- albeit, at a lesser intensity when compared to Russia.

Ukraine has gone to the extent of breaking off its ongoing talks with the European Union (EU) to side with this pact. The country had feared that a deal with EU would lead the democratization of its economy and the popularity of Western values. However, when given an option to side with a former communist ally, the deal was too sweet to resist. Further, Ukraine is expected to save big- upto $9 billion yearly on energy. Simultaneously, Ukraine’s gross economic output of about $176 billion in 2012, are the kind of numbers that will bolster this new formed union, tentatively titled ‘Customs Union’. Where dollars don’t raise the bar against the far aggressive EU, population can. Ukraine’s 46 million consumers will be sorely missed by the EU, and warmly welcomed by the Customs Union. There surely is a long road ahead for this new bloc of trade partners.

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