World News

Russia, Kazakhstan agree customs union minus Belarus

ST. PETERSBURG, Russia (Reuters) - Russia and Kazakhstan agreed to launch a customs union from July 1 in a move that complicates accession talks with the World Trade Organization (WTO) and further sours relations with Belarus.

Russia will resume accession talks, now in their sixteenth year, next month, and it could possibly join the WTO within a year amid generally better ties with Brussels and Washington.

“We agreed to launch the customs regulations for the... union on a bilateral basis,” Putin told reporters at a briefing in Russia’s second-largest city, St. Petersburg.

The absence of Belarus at the first stage of the customs union could also increase the likelihood of oil price disputes between Moscow and Minsk which have previously led to the disruption of Russian oil flows across Belarus to Germany and Poland.

However, Putin said he hoped Belarus joins the union after the country approves all of the required legal statutes.

“We will apply to the WTO in a trilateral format (in this case). If it does not materialize we will apply together (with Kazakhstan),” Putin said.

He confirmed that there is a fundamental disagreement with Belarus over energy pricing as Russia has refused to abolish export duties on the oil it sells to Minsk, something analysts had seen as a the key reason for Belarus to join the pact.

Minsk has already offered to sell control of its major energy assets to Russian firms, but Russia does not believe this alone would solve existing problems in energy price talks.

Reporting by Dasha Korsunckaya, writing by Dmitry Sergeyev, editing by Ron Askew