At the beginning of July, Russia, Kazakhstan and Belarus signed a number of protocols establishing a customs union between the three countries. The union, scheduled to be fully operational in January 2012, will create a single common market of about 170 million people and represents the latest of several attempts by Moscow to create an effective trade bloc with its newly independent neighbors since the break-up of the Soviet Union. In addition to the economic ties maintained through the establishment of the Commonwealth of Independent States (CIS), Russia first committed to a union with Belarus in 1994. That was followed by another in 1996 with Belarus and Kazakhstan, which after gradually expanding to include Kyrgyzstan, Tajikistan and Uzbekistan was renamed the Eurasian Economic Community (EurAsEC) in October 2000. Nonetheless, little concrete action has followed these ambitious announcements, leading Moscow to try again with the restricted formula.
The economic benefits of unions of this kind are questionable, however. Trade blocs among middle-income countries with similar economic structures and natural resource endowments are costly to implement and hardly generate new trade beyond the distortive flows triggered by an inevitable trade-diversion effect. That has led some analysts to speculate over why Moscow has assigned such a remarkably high priority to these projects.
Anders Aslund, senior fellow at the Peterson Institute for International Economics, has argued that Russia's customs union plans might be an attempt to sabotage the success of its World Trade Organization (WTO) application. Despite Moscow's vocal desire to join the global trade group, many in Russia consider membership as detrimental to the interests of the country's resource-driven economy -- and the customs union will further complicate Russia's already lengthy accession procedure. For instance, in June 2009, when Prime Minister Vladimir Putin declared that Russia would join the WTO as a single custom territory with Belarus and Kazakhstan, it brought negotiations to a halt just when a breakthrough seemed imminent. The three reverted to separate accession procedures a few months later.