Transcript:

Dmitry Medvedev: Ladies and gentlemen, allow me to make a brief introduction. We’ve had an interesting day today. We’ve attended the forum, Common Economic Space: New Opportunities for Industrial Development. I think it was a useful forum. Its participants discussed ways to resolve the most diverse and urgent issues in the context of our common Eurasian economic space and spoke about industrial cooperation. You have heard what we had to say. I think it was useful both for us and for representatives of the business community, all the more so since they are eager to bring their questions and concerns to the attention of the prime ministers and presidents of Customs Union member countries.

We’ve held a working meeting on industrial policy and ways to promote integration and industrial cooperation.  I’ve quoted an impressive figure today that shows the potential of our cooperation – a 36% increase in our mutual trade. I’d like to emphasise that it was achieved not only by price hikes on fuel and energy. No, these are changes in quality. Our trilateral trade has reached $125 billion. You will no doubt agree that this is a huge sum for our economies, especially at a time when the global economy is beset with difficulties.

We’ve discussed different issues today and have agreed to discuss in the future all questions that arise in the same open manner. Far from all of them can receive instant answers. For example, one of the questions discussed today concerns policy in the alcohol market and some tax issues. Of course, this is a question of jurisdiction and the relevant commissions, boards and councils that should be involved. At the same time we realise that unless we work on these issues in one way or another, we will fail to reach any agreement. An example of such a successful compromise is the issue of the so-called disposal tax for cars. These measures are needed to protect the national car industry as Russia joins the WTO (to be followed by our partners’ accession to the WTO), and on the other hand, to protect the environment, for a more normal use of transport. The decision taken is generally OK with us, and this is precisely such a compromise that people can always reach if they respect their partner’s opinion.  

The Eurasian Economic Commission started its work on February 1, 2012. Foreign trade is gradually being handed over to it. Of course, we want this commission to be as effective as possible; we will do our best to help it.

Today we discussed joint projects, and not only discussed them. One of them involves transport logistics. Several documents were signed on the sidelines of our meeting too. They are concerned in particular with the future creation of a joint venture for organising railway container transport between Russia, Belarus and Kazakhstan. We hope that the implementation of this idea will come in the near future. All partners support this idea. But this is only one of the themes, because we discussed other issues too.

I want to thank my partners for their businesslike, open, constructive and friendly talks. This helped to tackle all existing problems, and before that we had met and discussed these problems in a bilateral format and with an extended participation of deputy prime ministers and ministers. This was also very useful because it made it possible to compare notes on a great number of current issues. Thank you for your attention and I give the floor to my colleagues. Go ahead please. 

Mikhail Myasnikovich: Thank you. Ladies and gentlemen of the media, I’d like to draw your attention to three issues that I consider to be most important.

To begin with, I’d like to say that our meeting today and the discussion of all the complex issues was held in a constructive spirit of mutual understanding. This is very important. Indeed, our views coincide on global issues, both current and future ones.

Second, concrete projects to be implemented in the common economic space are beginning to take shape both in the traditional economic format of our union state with Russia and in EurAsEC and, most importantly, in breakthrough technology of the future.

Third, I think the most promising direction is linked with innovation development, which was actively discussed at the forum. We have mastered trade and investment in joint projects and we are doing this in a big way and on the basis of reciprocity. As I said, participants in the forum actively discussed innovation development oriented to the future. They have adopted a major decision on the drafting of an intergovernmental agreement on industrial policy and scientific and technical innovation cooperation as an indispensable part of this policy. If we actively tackle these issues, we’ll develop sustainable cooperation and will only further consolidate our intellectual potential. I would like to thank Mr Medvedev and Mr Massimov for their constructive approach to the Belarusian initiatives and requests. Thank you.

Dmitry Medvedev: Thank you very much.

Karim Massimov: Good evening, ladies and gentlemen. I’d like to add a few points to what my colleagues said about today’s meetings.

First, business people from three countries have met today in the presence of the prime ministers. I consider this meeting very important and necessary. This is the second time we meet. Now we have agreed to hold such meetings every year and each time in a different country. The next forum will take place in Astana in June. Each time business people raise different issues, which points to the deepening cooperation between our countries. Last year they mostly asked questions about the Customs Union, which had just been launched, whereas now they are interested in more challenging issues linked with the common economic space and new business opportunities in our countries. I think this is all very useful.

I have also held bilateral talks with the prime ministers of Belarus and Russia. We discussed issues of bilateral cooperation in a constructive manner. I hope we will respond successfully to all the challenges. In the talks with Belarus, Kazakhstan supported the extension of the West China-West Europe corridor, which goes in two ways – via Kazakhstan and Russia and up to the Belarusian-Polish border and back from the European Union through Belarus, Russia and Kazakhstan with an outlet to Asian markets. I consider this route very promising. In addition, as it has already been mentioned, we’ve agreed to set up a common transport container company for our three countries. It’ll travel the same route but by railway. When we do this we’ll be able to compete with sea routes from South-East Asia to the European Union.  

In order to become more competitive we must make business easier for our companies, and we have talked about ways to achieve this. Perhaps, we should review the Customs Code of our countries to facilitate business that has transcended national borders.

At bilateral talks with Russia we resolved very important issues of trade in oil and oil products. We’ve agreed in principle and now we must provide a legal framework for our agreement and sign it. I’d like to thank Mr Medvedev for such headway. We discussed this issue for the first time two weeks ago in Astana and now we have reached agreement on it.

As for the Baikonur Space Centre in Kazakhstan, we have agreed to upgrade the level of the Kazakh-Russian intergovernmental commission. It will be now co-chaired by First Deputy Prime Minister Igor Shuvalov on behalf of Russia and Deputy Prime Minister Kairat Kelimbetov on behalf of Kazakhstan. By upgrading the level of this commission we’ll have an opportunity to resolve a number of issues involving Baikonur.

We’ve also discussed missile launches. Today Kazakhstan has agreed to allow Russia to make these unscheduled launches.

I think we have reached good agreements that will allow us to address sensitive bilateral issues.

Now I’d like to say a few words about the tripartite commission, which has taken our cooperation forward. We’ve made decisions on many issues and outlined the agenda for our next meeting. I think such meetings are necessary and useful for our nations. We are able to move forward together and stave off the crisis that is raging around the world. Thank you very much.

Moderator: Ladies and gentlemen. You are welcome to ask questions – one question from each side. Let’s start with the Russian press. Please, don’t forget to introduce yourself.

Question: Good afternoon. Russian Information Agency RIA Novosti. My first question goes to all prime ministers and has to do with disposal fees. Could you please specify the amounts? My second question is about the Russia-Kazakhstan agreement on petroleum products. What are the prices, amounts and deadlines? When will this agreement be formalised in writing?

Dmitry Medvedev: Just two questions? You could have asked us as many as three right away. I will begin, and my colleagues will elaborate if need be.

With regard to the disposal fee, the issue has to do with Russia’s accession to the WTO. Our market will open up, the duties will go down and a host of sensitive issues related to the environmental protection and safe use of vehicles will come to the forefront. A lot of clunkers will be imported. They are being imported already, but it’s nothing compared to what will be brought into Russia after accession to the WTO. It will be hard to offer an alternative. To a substantial degree, it will hamper the development of the Russian automotive industry and be detrimental to its current projects. The disposal fee has to do exactly with these issues. We have discussed it extensively, especially given that Russia is about to ratify the WTO agreement. Our partners and friends are in the process of negotiations. There are issues that need to be further discussed and some subtleties. We know first-hand that this is a difficult, I would even say a tedious job, but it nevertheless has to be done. We have arrived at a compromise that suits everybody: our partners will preserve their current tariff policy protection measures. We have used this formula in our work for some time now. We will get back to this issue later and make final decisions in order to protect our markets, on the one hand, and make sure we don’t create any problems for our partners as a WTO member, on the other hand. Please feel free to add to this whatever you think should be added.

Mikhail Myasnikovich: In general, I agree. We have made a joint decision, a very difficult one. However, this confirms that there are no irresolvable issues, but there is a common goal and mutual understanding. I would like to note that the decisions that we have made will incentivise our respective automotive industries and help them work with third countries in a civil manner.

Karim Massimov: In fact, my colleagues have said everything there was to say about disposal fees. I would like to point out the following: today, the prime ministers touched on a very sensitive point related to issues that are not formally overseen by the Eurasian Economic Commission, but can affect the workings of the entire Common Economic Space and the Customs Union. Today we have agreed in principle that we are not going to gloss over such problems. In other words, we will act with integrity, honesty and openness as we always do in our bilateral relations. We will also raise these issues in the context of trilateral relations, and then we will find such compromise solutions that will not compound the problem, but at the same time we'll take the interests of all parties into account. We found such a solution for utilisation collection, for example. It is legally justified, and meets all of the requirements of the Customs Union agreements signed by the three prime ministers, as well as the requirements for the potential accession of Kazakhstan and Belarus to the World Trade Organisation. Russia, as we know, will fully accede to the WTO in a few weeks, and we congratulate you on this, Mr Medvedev.

Dmitry Medvedev: No congratulations in advance. Nevertheless, we are indeed on the threshold.

Karim Massimov: You're at the finish line…

Dmitry Medvedev: That's right. There is still the oil issue…

Karim Massimov: The oil products. I would like the members of the media to recall that according to the agreements in the package for a single economic space, we have agreed... We are technologically connected in such a way that one of the refineries, located in eastern Kazakhstan, in Pavlodar, has been bound since the Soviet era to Russia's Siberian oil; in other words, it is still physically impossible for us to deliver different oil than that which comes from the Russian Federation. We agreed that up to 2014 the amount of oil that will flow from the Russian Federation – if I remember correctly, it is about six million tonnes – will be delivered to Kazakhstan without customs duty for this volume.

What was the more specific agreement reached today? It was on the supply of oil products to Kazakhstan by the Russian Federation. Today, we have agreed on how Kazakhstan will reimburse the Russian Federation's budget for the losses of a potential shortfall in export duties. These have been long and tough negotiations, but today we are, at least at the level of the relevant ministries, fundamentally agreed and the Kazakh side has already made an appropriate decision, in other words, adopted a government resolution. Let's hope that the Russian Federation will make a corresponding decision.

Dmitry Medvedev: I would like to confirm this, because we will consider an appropriate decision in the very near future at a government meeting. It is ready and has been co-ordinated among our agencies. This is another example of how to resolve existing and always complex economic issues in a collegial and timely manner. Where money is involved, it's always difficult.

Moderator: Question from the Belarusian media.

Question: Good evening, Belarus 1 TV Channel. Going back to your meeting this morning with the business community, it is understandable what businessmen expect from the politicians – clear rules of the game and a distinct vision for the future. What do you as prime ministers, in turn, expect from business? Because $125 billion is, of course, a beautiful and ambitious figure, but I think when this project began, there was hope for greater business activity. You are now hoping for a discussion with them, so what kind of assessments do you expect to hear from them, what kind of advice and will you listen to their advice?

Dmitry Medvedev: May I start? When this project began, at least in my tenure as president, I did not count on anything. I just absolutely did not believe that we would stand before you and speak on the Customs Union in any capacity. I estimated the probability of reaching agreement at 10%. And I must pay tribute and say words of gratitude once again to my colleagues, who together with Russia have shown such a persistence that led to the emergence of the Customs Union and common economic space. Our views may differ, but I believe that the chances were very small and the fact that this has been achieved is very good.

Another thing. I talked about this today, and I reiterate. When we all decided to step up activity – and I remember my conversations with Nursultan Nazarbayev and Alexander Lukashenko, we were told straight away, “You will not join the WTO, because your idea is crazy, it is dangerous to the WTO, and no one will accept you.” My perception was different at the time, and fortunately I turned out to be right. We were more readily welcomed into the WTO simply because they understand that such important participants in international economic relations as our countries – and they are big countries – must play by the common rules of the game, they must act according to common rules that exist in the world economy, and I think that this is also good.

Finally, the last thing is about the $125 billion – is it too much or too little? I  find it difficult to operate in the same categories as journalists. You're in a better position to determine what is a lot and what is a little, what is big money and what is just some tiny $125 billion – in fact, it is exactly half of the trade between Russia and the EU. And the European Union is Russia's largest trading partner. The amount of  125 billion is nearly twice the entire amount of our trade with China, and this is not the smallest economy in the world. It is a huge amount of money. And it increased by 36%. That’s our trade.

I agree that we should probably never be content with the way things are. We need cooperative projects, and this has been talked about today. But what sort of projects? Not just the ones that bosses conjure up in their heads – it would be good to use those as well – but grassroots inspired projects also, when we have cooperation in the innovation area (high-tech area), as well as in transport, logistics, and other areas.

That’s why there may be various estimates. But I believe that integration results over the past few years are not just impressive, they’re quite significant. And our businesspeople see it too. What do they expect from us? They want us to tell them directly what our intentions and problems are so we can react adequately to the current challenges.

And I’d also like to talk about another matter that neither my colleagues nor I mentioned. We agreed to be more active in coordinating our anti-crisis efforts (I don’t want to be known as a dour pessimist), but as you know, there are different points of view. Some suggest that the crisis may hit us unawares in the coming days. And we should be ready to face another global recession. What does “ready” mean? It means activating the range of tools that have been developed since the autumn of 2008. We have these tools now, they are ready at hand but considering that we are now working within the framework of the Customs Union and the  Eurasian common economic space, we should synchronise the application of these tools. If we use them, we should not forget about our partners and should not make decisions that could result in internal contradictions. We have agreed to synchronise the work and shall pay much more attention to that because all the information coming from the European Union and some other markets is very, very disturbing.  That’s why I’d like to express my appreciation to our colleagues for their productive exchange of opinions.

Mikhail Myasnikovich: What’s the value of meetings between heads of governments and the business community? It’s in the open dialogue and in taking direct action, as they say. No experts, however experienced and knowledgeable… will be able to create, without a proper political approach, the conditions for a good business environment.  But when decision are made promptly…as we have done today both within the framework of bilateral relations and directly at the plenary meeting with the business community, then … it means that we are moving in the right direction, and much faster at that.

Moderator: Esteemed colleagues...

Dmitry Medvedev: No, Mr. Massimov has not spoken yet.

Karim Massimov: I’ll be brief. First of all, I support everything that has been said by my colleagues, they said the right things; these are our common agreed upon opinions. There are few times in international relations when three prime ministers come out with practically no disagreements, with a common will to move forward. I’d like to add a comment: following Kazakhstani President Nursultan Nazarrbayev’s instructions, a boosted industrial, industrial-innovation programme is being carried out in Kazakhstan. When we launched it, it was originally meant for Kazakhstan only. Now we realise that we are working in a commone space, and a nation’s industrialisation programme is probably not an issue. I believe that industrialisation and technological modernisation are more important when they cover and take into consideration the interests of all the three nations. That is, creating competing enterprises inside the common space and investing resources in them, I think, is not really the right approach since we can devise some sort of cooperation, and by cooperating, we will be able to compete for third party markets.

To answer your question about what we expect from our businesses: we expect a greater involvement in technological modernisation. Mr Medvedev keeps speaking about it, and we have great hopes that since the intellectual and scientific potential of the Russian Federation are high, we will be able to somehow implement those ideas and potential into practical mechanisms, for our industry to at least become comparable to the best examples of the developed countries. There is no easy solution, just hard work. That is what we expect from business, and we hope that we’ll find the solutions in the state-private partnerships, in the interaction of the three nations, in all our common space, so that the enterprises operating in it will, after a certain period of time, be able to become real competitors to their western counterparts. Thank you.

Moderator: The last question from Kazakhstan’s media, please.

Question: Hello, Kazinform news agency, I have a question for the Russian Prime Minister. Mr Medvedev, you mentioned Russia’s joining the WTO today. Could you please talk about how Russia’s relations with Kazakhstan and Belarus will be different after you become a member of the World Trade Organisation? Thank you.

Dmitry Medvedev: After joining the WTO, our relations with our strategic partners, Belarus and Kazakhstan will be built on the same principles – those of good neighbours, of a working union, on the principles of long-term economic integration; nothing will change in our approach. Joining the WTO is not just our goal but also that of Kazakhstan and Belarus, so it will have no effect on our relations. As to some minor technical issues that are ever present in any relations between nations – just have a look at the endless arguments inside the European Union, the most integrated community so far: I am not speaking about the crisis, nevertheless, the degree of integration there is enormous. We will be solving those minor technical issues with the same friendly attitude we have seen all day today. Thank you, and good luck to everybody.

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After the news conference the prime ministers of Russia, Belarus and Kazakhstan walked on Senate Square.