Press Conferences

19 november, 2010 20:45

The heads of government of Russia, Belarus and Kazakhstan hold a joint news conference

The heads of government of Russia, Belarus and Kazakhstan hold a joint news conference

Vladimir Putin's address:

Ladies and gentlemen,

Today we have had informative, productive meetings. There was a meeting of the Council of CIS Heads of Government and sessions of the EurAsEC Interstate Council and the Customs Union's governing body.

Together we looked into issues related to the development of our multilateral trade and economic conditions as well as scientific and technological cooperation. We also discussed the implementation of a number of large-scale joint projects.

All in all, the dynamics of trade relations in the CIS are encouraging. From January to August of this year the trade turnover between the CIS countries exceeded $120 billion, which is 30% more than in the same period last year. It is now important to maintain this momentum and take advantage of all available resources.

This is what the new agreement on a free trade zone in the CIS is intended for. It will be based on the regulations of the World Trade Organisation, and it will replace the obsolete 1994 agreement. It will become a firm legal basis for the promotion of business partnership in the CIS. We have agreed to finish the work on this agreement by the end of this year.

We have managed to make significant progress in other areas, too. The Agreement on Cooperation in the Protection of Intellectual Property was signed at the meeting. We are planning to closely coordinate our efforts in this important area and provide each other with legal assistance, thus creating a civilised environment for the development of innovative business and for the implementation of research, information and creative projects.

In connection with this, I would like to bring up the idea to open exhibition halls for CIS countries at the Russian Exhibition Centre in Moscow. Corresponding agreements have already been signed with Belarus and Kyrgyzstan and we are negotiating this with other partners. Almost all of our partners expressed interest in this project.

I believe that these will be popular venues for directly establishing business, cultural and scientific ties. It is also important that we are reviving this old, and good, tradition and that many visitors to the exhibition halls in Moscow will be able to learn more about their neighbours' contemporary ways of life, their achievements and plans in the economy and culture.

During the EurAsEC meetings we focused on the organisation's development priorities. We discussed the action plan for the period from 2011 through 2013. The implementation of this plan will have a positive impact on the integration of former countries of the Soviet Union. We are very close to creating the EurAsEC court, which I consider especially important. This will be a specialised body to settle disputes in the organisation, available for economic entities, including those from third countries.

The establishment of this legal mechanism will certainly contribute to the stable and sustainable development of trade and economic relations within the CIS and improve the investment and business competitiveness of our national markets.

At the meeting of the Customs Union's governing body we focused on the further development of the union. We considered a package of agreements regulating the application of standards for sanitary supervision and of anti-dumping measures in trade. Hopefully, I speak for everyone when I say that these measures should not create barriers for trade relations between our three countries.

Naturally, our key priority is the launch of the common economic space between Russia, Belarus and Kazakhstan. It should begin working in full no later than 2012.

Our ministries and government bodies currently carry out large-scale preparations. They are coordinating their positions almost daily and are searching for mutually acceptable solutions. I would like to point out that they have made significant, concrete progress. The main thing is that our common interests are clear in achieving these goals.

Honestly, if someone had told me two years ago that we would be at the point we are at now I would have hardly believed it because this work involves such sensitive issues for our economies. Nevertheless, we are reaching agreements.

I would like to emphasise that there are projects with different forms of participation for member countries and varying degrees of depth of integration in the CIS. I think that this is a strong advantage of the commonwealth and evidence of the fact that our countries are truly interested in close cooperation. And it will determine the particulars of their participation in the integration processes, depending on their national interests.

I would also like to stress that all three of today's events were held in a professional and productive atmosphere. And most importantly, they all yielded positive practical results.

Thank you for your attention.

Sergei Sidorsky: Ladies and gentlemen,

During today’s session of the EurAsEC Interstate Council which we just closed, we discussed some of the most crucial issues of the alliance’s development, primarily ones related to the creation of the Customs Union and of the Common Economic Space. By establishing the Customs Union and paving the way for the Common Economic Space, we’ve brought our integration efforts to an entirely new level. We’ve come a long way; the Russian prime minister outlined the work that has been done during his remarks before me.

Now we’ll focus on resolving problems related to the Customs Union’s operations, above all the removal of existing barriers to mutual trade, which are currently being discussed bilaterally and in the format of the Customs Union.

We’ve done our utmost to ensure that agreements on the Common Economic Space are signed before January 1, 2011. This will create more opportunities to tap the economic potential of EurAsEC.

Earlier today, we reviewed progress on the implementation of measures envisaged in the 2008-2010 guidelines and approved plans for EurAsEC’s development in 2011-2013. The achievement of concrete results in some specific areas is important not only to the EurAsEC member nations, but it also boosts the effectiveness of this organisation as an international player. As was already pointed out today, CIS prime ministers have been actively contributing to the work of EurAsEC.

We witnessed quite disconcerting events this past summer as extremely unfavourable weather caused heavy losses in the agricultural sectors of many EurAsEC countries. This situation made it even clearer that we need coordinated international efforts to ensure food security.

We discussed related issues earlier today and adopted an action plan to implement the Food Security Concept of the EurAsEC member states.  This document calls for, among other things, the creation of a common network of outlets for selling agricultural products as well as the development of standard methods for making mid-term forecasts on the main types of produce.

We approved today an interstate targeted programme for the creation of a common database to allow for computer-assisted customs transit control within EurAsEC. And we believe that when implemented, the document will enhance the member states’ transit potential.

At today’s session of the Customs Union’s governing body, we examined the issue of how to create and operate an integrated database and issued appropriate instructions. Specifically, we approved a database concept for the Customs Union’s foreign trade transactions, a set of priority measures for building the database for 2010-2011, and a provision on a coordinating council for computerisation projects. 

The competitiveness of products made within the EurAsEC could be enhanced primarily through broader cooperation between the high-tech companies of the member states. We therefore have great hopes for the High Technology Centre, whose work is aimed at coordinating efforts by various research centres to develop and implement collaborative high-tech projects. In our view, this centre fits well into high-tech programmes adopted by the national governments of the EurAsEC member states.

As Mr Putin said earlier, we signed a number of agreements today on the creation of the Common Economic Space. We’re quite satisfied with the way our deputies are laying the groundwork. And there is nothing preventing us from signing, by early December of this year, the entire package of documents on the Common Economic Space, completing the task the heads of state have assigned us.  Thank you.

Karim Massimov: We’ve had three highly important meetings today, I think, and they showcase three different models of post-Soviet integration.

First of all, there is the Commonwealth of Independent States. Today, we’ve discussed a highly important issue related to the elaboration of a new Treaty on a Free Trade Zone within the framework of the CIS. This is one possible form of reintegration.

Secondly, there’s been a meeting of EurAsEC, which represents a deeper form of integration, leading to the creation of a customs union. 

A Customs Union meeting followed. It would not be an exaggeration to say that by the end of 2010 we’ve finally got that organisation up and running, despite all the snags encountered along the way. While building its foundation, the negotiators of the three countries were able to find mutually acceptable solutions, which highlight the advantages of being part of the Union as well as its viability. 

The business communities in each of the member states, as well as our economies at large, stand to benefit from the new alliance. And many of our businesses have come to feel the benefits already.

A number of agreements laying the groundwork for the Common Economic Space were confirmed by prime ministers of the three countries earlier today, and many were signed. Which is an important achievement, making it possible for the entire package to be ready for signing by early December 2010. This will provide new opportunities for deeper integration, creating a level playing field for companies of the member countries and strengthening their competitive edge.

At the end of the day, our Customs Union and the Common Economic Space we are building on its foundation should prove competitive vis-à-vis other such alliances, including the European Union and other alliances. At today’s meetings, we discussed solutions that could make that happen.

It is symbolic that all this progress has taken place against the backdrop of a global economic downturn. So, perhaps, in a sense, this is our response to the challenges currently facing the global economy.  I personally view (the creation of the Customs Union) as a landmark event, brought about by agreements between the governments of the three member states. And citizens of our countries are sure to feel its positive effects before long. Thank you.

Question: You discussed the creation of a free trade zone at today’s session of the CIS Council of Prime Ministers. The Interstate Council session focused on issues related to the Customs Union and the creation of the Common Economic Space. In this sense, isn’t the Common Economic Space redundant? Are there any ways in which the two unions conflict with each other, and what unresolved differences remain over the Common Economic Space? Thank you.

Vladimir Putin:  Concerning the various forms of post-Soviet integration, this may, indeed, seem confusing to the average person: the CIS, EurAsEC, the Customs Union, the common economic space. Why do we need such diversity, and what’s the difference between the two? Much can be said about it, but I will mention mere two or three points. By and large, we are doing it all for our consumers to have quality goods and services at reasonable prices, and for our markets to obtain these goods and services at affordable prices. The free trade zone has two or three simple tools to achieve this goal. We abolish import duties for commodities manufactured in the countries within the free trade zone, and admit quality goods to our market at affordable prices, as I have just said.

The Customs Union and the Common Economic Space involve closer integration, which demands all customs and tariff barriers removed so that goods and services can flow freely between our markets. We are establishing a common external border and providing conditions for equal competition within it. That is what the Common Economic Space is about, with its unified regulation standards and economic policy, which are there to prevent some manufacturers in some countries from gaining advantages at the expense of others. At the same time, we should create the best possible conditions for their work within the economic community and competitive advantages in other markets. These are sensitive matters, which demand thorough analysis.

So when you ask me about points of contention, all I can say is that we have none, but there is an ongoing, complex process of coordinating our interests. What do we see as the most difficult issue? We have already talked about issues related to energy – electricity and hydrocarbons. We talked about it all today, too. What was our dispute about? We talked, for example, about what should be considered equally profitable prices. We often talk about equal profitability in Russia, as well, but as far as the Russian domestic market is concerned, we mean equal profits for our manufacturers – Gazprom and independent businesses, that is, equal profits compared to export prices. We are not rushing toward it, we are guaranteeing both producers’ and consumers’ interests. We discussed today what we regard as “equal profits” for various commercial entities in the three countries and, on the whole, we have agreed on a unified approach to these terms and concepts.

We talked, for instance, about the automobile market. Some want to have the opportunity of importing second-hand cars and lorries, while others say: “No, we’ve already passed through this stage. Now we want to focus on developing our own automobile industry, because we have already done this and that for it.”

While it was difficult, we agreed how to do it without harming domestic consumers and manufacturers – carriers, in this instance. But we are determined to do it, and are doing it, in conformity with our plans to join the World Trade Organisation, with which we stay in close contact. We have talked about it all today, too.

I would like also to mention in this connection another critical point we have agreed. I have mentioned it now. I mean the ways and means of settling disputes that may arise in our joint economic activity. We are establishing procedures for settling disputes within the CIS, including so-called ad hoc courts. Disputes in the Common Economic Space will be settled in EurAsEC courts, which we are vesting with certain rights which are of critical importance for establishing civilised economic relations and respecting the interests of all parties involved.

Question: The CIS Economic Court recently recommended to the Russian government to speed up consideration of suspending customs duties on oil products exported to Belarus. How do you intend to respond to this recommendation? And, if I may, I have another question, which is a follow-up to my first one. The terms of Russian oil exports to Europe are being revised now. Considering this, how will prices on gas be set for Russia’s closest neighbours, particularly Belarus?

Vladimir Putin: Considering what?

Question: Considering the upcoming revision of the terms of Russian oil exports to Europe. Do you think pegging gas prices to oil prices is obsolete? Thank you.

Vladimir Putin: The EurAsEc court recommended that the consideration of issues related to price formation be accelerated. You have said it correctly: The court recommended it be sped up. It is mere recommendation, not a binding decision. As we form the EurAsEc court, in which we are introducing relevant changes, we are giving its decisions more weight, and we hope everything will work. Today, however, it is only a recommendation. We are willing to listen to it and analyse the matters it concerns. I assure you, we have talked about it today and we will continue the discussion as I meet with Mr Sidorsky now. At the same time Belarus is fully aware of our position. We proceed from the basis that previously signed contracts must be honoured. That’s my answer to the first part of your question.

I will answer the last part of your question now, and then return to the second one, about whether pegging gas prices on oil prices is obsolete. I don’t think you are right. More than that, I don’t see now any other market method of setting gas prices. Gas prices are pegged to world oil prices. This is not done by any administrative methods, but by the market itself. These oil prices emerge from the world’s exchanges. This is true market regulation – and this is where gas prices come from. No one has ever suggested another effective market tool for pricing gas. I mean a true market tool.

Finally, regarding changes in the terms of Russian oil exports to Belarus. As you know, we reached an agreement last year, and we are meeting our commitments. Duty-free supplies of our crude oil cover demand in the Belarusian economy. Truly, domestic needs are fully covered by duty-free exports of Russian oil to the Belarusian market. As for tentative changes of the terms of Russian oil exports to Europe, I haven’t heard anything about it.  

Sergei Sidorsky: I appealed to the Russian prime minister in due course and in compliance with the CIS court decision, and proposed that customs duties levied by the Russian Federation on oil and chemicals exported to Belarus be cancelled before the dispute is settled and before January 1, 2011. We will discuss the issue today following this conference. At any rate, Russia intends to abolish these duties by January 1, when all the founding documents of the Common Economic Space are signed.

Our petrochemical companies are sustaining considerable losses, so, naturally, we have made a request on this score, and our request remains valid. That is the Belarusian position.

As for gas prices, we have discussed these questions in the Customs Union today, and agreed to consider the problems of equal profits and gas price formation.

There are currently many proposals by gas consumer countries concerning gas available in the free and spot markets, and the prices of gas supplied to Europe by Gazprom on contracts are plummeting. That is what Belarus proceeds from. There are certain concessions on the formation of the end gas price. We will naturally propose that our Russian colleagues consider Belarus’ request to take our suggestions concerning the equal profitability of gas prices into careful consideration. However, this is our position at the negotiating table. I am grateful to Mr Putin for giving the relevant instruction to Gazprom during our latest meeting. Thank you.

Vladimir Putin: I would like to make a few comments. I have never heard about price concessions for our European customers. They have been asking these questions for a long time (not a very long time, I mean – at any rate, they asked during the downturn, when the demand for gas shrank), but Gazprom did not make even the slightest concession. As for our Belarusian friends and partners, they receive gas at the lowest possible prices – it could not be any lower. These prices are calculated according to formulas, but they are the lowest possible. Not a single  foreign customer buys gas at a price lower than Belarus. These are the lowest prices, but we will discuss all problems today all the same.

One more quick remark. We have agreed on the possibility of cancelling export duties for crude oil not when the entire package on the Common Economic Space is signed, but when it is ratified.

Question: I represent Kazakhstan. I have a question for the Russian prime minister. Mr Putin, it was recently announced that Russia will not grant local businesses any railway transport privileges. A company can have a budget subsidy only when it proves that it needs such support. What will become of transit tariffs in this connection, and what is happening to them now? Thank you.

Vladimir Putin: We have already agreed on these transit tariffs and arrived at compromise solutions, which are acceptable to Kazakhstan. We have also discussed subsidies in many economic sectors today, and also come to an agreement. The documents have been coordinated in principle, and some of them have been signed, if I am not mistaken. So there are no contradictions here.

Everything will proceed according to our agreement and our partners’ interests. We understand that, in this instance, our partners’ interests concern the shipments of, say, Kazakh grain or Belarusian industrial goods to Kazakhstan or, the other way round, via Russia.

We have agreed on everything and reached a compromise. Mr Massimov, are there any more details? I am not sure.

Karim Massimov: Mr Putin, I would like to confirm that the issues Kazakhstan has been raising, if I am not mistaken, for the entire previous 19 years concern railway transits and fares. It was critical for Kazakhstan’s industry and remains critical in the package of agreements discussed today. Now all issues have been settled. Within the frame of the Common Economic Space, we have no differences at all in our understanding of railway transit. It is critical for the economy of Kazakhstan.

I would like to use this occasion to say that for similar issues, including electricity transit in the package of agreements, we have also found mutually acceptable solutions for industrial companies in Kazakhstan’s west, which has shortages of electricity, among others. We can also solve these issues with the transit of Kazakhstani electricity across Russia. So the package on which we worked today is not a bunch of theoretical or utterly useless papers. They concern practical matters and will help industry in all countries in the Customs Zone and the Common Economic Space. Our industry will feel improvements quite soon.

I would like to use this opportunity to announce the position of Kazakhstan on energy price formation and consumer prices in our countries’ markets. On the whole, all the three national economies – Belarusian, Kazakhstani and Russian – have industrial modernisation on their agenda, which involves energy efficiency.  I don’t think any company will be eager to achieve energy efficiency and modernise production unless this problem is solved.

I think that our current coordinated policy lays the groundwork for making our economies more competitive, though many think otherwise today. To be precise, the approach to new global standards, the standards of the European Union and the developed countries – I think this is the way to encourage our businesses to embark on the right road. Thank you.

Vladimir Putin: As far as railway tariffs are concerned, you surely know, if you have asked this question, that export freight transport subsidies are the most sensitive to any country, Russia being no exception. We have discussed the problem in sufficient detail and verified our positions so as not to damage our consignors and carriers – and we have arrived at coordinated positions.

Thank you very much.