20 april 2012

Prime Minister Vladimir Putin holds a meeting with Chairman of the Board of the Eurasian Economic Commission Viktor Khristenko

Mr Putin and Mr Khristenko discussed key areas of activity of the recently established Eurasian Economic Commission which, according to Viktor Khristenko, “has been fully operational since day one.” The prime minister inquired as to whether there were any difficulties in its work and whether the commission needed any assistance from the Russian government.

Transcript of the beginning of the meeting:

Vladimir Putin: Mr Khristenko, you have taken up a new job. How is it going? Are you seeing any difficulties or problems? Do you need any help from the Russian government?

Viktor Khristenko: Thank you, Mr Putin. First of all, let me thank you for your interest in the commission. I think that this will be one of the main reasons behind our future success. The commission is a multinational body, but its work is largely based on effective cooperation with national governments, which is what makes our ambitious goals achievable.  

The commission has been fully operational since day one, primarily with regard to the work of the Customs Union. The sales volume between the three member countries of the Customs Union and its international partners will exceed one trillion dollars in 2012. This is quite impressive. Trade between the three union members amounted to over $75 billion. To a large extent, these gigantic commodity and financial flows are already regulated by supra-national authorities. The economies of the Customs Union’s members largely depend on the effective work of these bodies and the Customs Union in its entirety.

That is why we started working right away to establish the fast-paced and effective operation of the outer customs contour, which is a task of paramount importance for us. We are already making all necessary decisions in the sphere of customs regulations. Recently, we approved three new technical regulations covering furniture, small boats and food products for dietary treatments. We are about to finalise regulations for dietary supplements in the next few days.  In other words, work is being carried out effectively even as we are in the process of establishing ourselves as a fully operational entity.

On January 1, we were confronted with the new task of making the Common Economic Space really work. This goal requires undertaking major efforts in two areas: developing about 60 new agreements, which we have already begun doing in conjunction with national governments, and codifying the existing legal and contractual framework. The issue concerns over 70 agreements that have been developed over the past years and that need to be codified and transformed into a uniform legal base so as to facilitate our work during the next phase of operations under the Eurasian Economic Union. In fact, this goal was set by the presidents of member countries and is meant to be achieved by January 1, 2015. I hope that we will be able to comply.

Importantly, we are not just performing this work by ourselves, but in conjunction with national governments and businesses. We have established several advisory committees that include delegates from the governments of the three countries representing different departments, such as trade policies, technical regulations and tax administration. Acting within the framework of the trilateral business dialogue between Belarus, Kazakhstan and Russia that represents all unions and associations of industrialists and entrepreneurs from these countries, we are finalising the establishment of an advisory board with the business community that will embrace all activities conducted by the commission and the new union. Ongoing contact will help us to remain grounded in reality and, most importantly, to effectively assess and verify decisions as they are being developed.

At the same time, we are working on the commission’s organisational structure and staffing issues. In accordance with the agreement, we are conducting this work, including hiring staff, on the basis of competition, which we hope will help us bring good, if not the best, specialists onboard. The competition is fairly stiff, with seven applicants per spot. Generally, the job applicants include people with extensive work experience. Overall, progress is good.

Vladimir Putin: What about our other CIS partners who are not yet members of the Customs Union? Are they interested in the commission’s work? Are they willing to join in? Are they sending over their experts?

Viktor Khristenko: Yes, Mr Putin. This is an important issue, primarily for the EurAsEC countries, such as Kirghizia and Tajikistan, which announced their plans to promote integration and join these processes. We are about to complete the establishment of working groups and have already developed a road map for their access to the Customs Union and subsequently to the Common Economic Space of the EurAsEC members.  

Of course, key partners are also interested, particularly Ukraine. My first working visit outside of the Customs Union was to Kiev on the invitation of the Ukrainian prime minister. We discussed the terms and conditions of the current cooperation with the Customs Union, since all sensitive issues are being regulated with the involvement of countries bordering on the Customs Union member countries. For Ukraine, this means enormous trade volumes that are worth about $70 billion. These are huge numbers, and they are major trade partners.

Vladimir Putin: What is the share of the Customs Union in Ukraine’s trade turnover?

Viktor Khristenko: It’s over 40%. In this regard, this is a very sensitive issue.

Of course, we discussed our current cooperation following the ratification of the multilateral agreement on free trade zone with the CIS countries. The agreement was signed in St Petersburg in late 2011, and Russia was the first to ratify it. We believe that the agreement establishes a reliable and up-to-date regulatory basis for cooperation between the Customs Union and Ukraine that is consistent with the WTO regulations and the way things are on the ground today. Importantly, these regulations can be updated and upgraded in the future. A free trade zone may become one such way to promote our relations with Ukraine, plus cooperation in the sphere of technical regulations. Universal regulations are very important in this area. Since we can’t talk about unification yet, applying universal standards is important if we want to minimise technical barriers and create favourable conditions along European lines. We are pursuing our policy precisely with an eye toward harmonising our standards with European ones. In fact, this is also good for Ukraine, as it is seeking to become part of Europe. Therefore, these countries are interested, and we are open to and interested in maintaining such a dialogue.

Vladimir Putin: All partners realise that certain preferences can be applied only to full members of the Customs Union and the Common Economic Space. Still, we need to look for any opportunity to deepen integration processes, even with countries that are not yet part of these integration unions.

For example, technical regulations hold a lot of promise and are essential for the real economic sector. We have established deep cooperation in this sphere with all the CIS countries, including Ukraine. Therefore, I believe that you are doing all the right things in this area. 

Viktor Khristenko: Another interesting aspect of our work has to do with expanding this union to include foreign countries. One of the first mandates for foreign activities received by the commission was a mandate to establish free trade arrangements with Vietnam with the understanding that Vietnam is not just an individual country, but rather an emerging regional hub in Southeastern Asia. We are now busy developing documents that can later be used to create free trade and more between the Customs Union and Vietnam.

Vladimir Putin: How do the salaries of your employees compare with those of members of the Russian government?

Viktor Khristenko: They are comparable. All board members’ salaries are equal to the salaries of government ministers. The salaries of the commission’s employees are comparable to the salaries of employees of the Government Executive Office. These are fairly good salaries for the commission’s employees in Russia.

Vladimir Putin: Otherwise you won’t be able to hire highly skilled specialists. It’s hard to find good ones.

Now, let’s get into more specific issues.