Kazakh president warns over Customs Union trade deficit

By bne IntelliNews October 18, 2013

bne -

Kazakhstan's President Nursultan Nazarbayev has warned about a growing imbalance in trade between Kazakhstan and its fellow Customs Union founders Russia and Belarus. That will do little to help Moscow's aggressive push to attract new members.

Speaking to civil servants in Astana on October 17, Nazarbayev - usually one of the top proponents of the Eurasian trade club - called Kazakhstan's growing trade deficit within the free trade zone "very dangerous" for the country.

"In the beginning, trade between the countries of the Customs Union was growing well, and now we have goods manufactured both in Russia and Belarus. We sell less and such a deficit in trade is very dangerous for us," Nazarbayev said, according to Interfax.

He advised the governors of regions bordering Russia to work more actively to raise exports. "You should work with neighbouring Russian regions and think about how to ensure that more of our goods go there," the president demanded. "One needs to work to do this; this is a competition. If we fail to become seasoned in this competition, then we will face a great competition when we join the WTO; what will we do then?"

Kazakhstan co-founded the Customs Union along with Russia and Belarus. Nazarbayev is a supporter of the Eurasian Union, which would see greater integration to eventually create a political and economic union, and has encouraging other countries to join the trade club.

Despite the deficit, a majority of Kazakhs remain in favour of the Customs Union. Over 7o% support the country's role in the Customs Union, according to a survey by the Eurasian Development Bank. However, the words coming out of Astana are unlikely to cheer Russian President Vladimir Putin.

Moscow is fighting in the trenches as it tries to push several former Soviet states away from signing off on closer relations with the EU at a summit in November, and into its club instead. It insists that the likes of Ukraine and Moldova will struggle economically if they open their borders to Brussels. Struggles in relatively robust Kazakhstan will do little to convince those countries that they will do any better in the Customs Union.

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