A Split in the Eurasian Union: Belarus Refuses to Join Russia’s Trade War with Ukraine
While Ukraine was preparing to sign the Association Agreement with the EU, Russia was trying to secure the support of Belarus and Kazakhstan in introducing protective measures against Ukrainian goods.
Moscow failed to convince its Eurasian partners that Kyiv’s Association Agreement would pose a threat to their economies and had to resort to taking unilateral action for raising customs duties on goods from Ukraine.
This case may well represent a model of relations that may come to dominate decision-making in the Eurasian Economic Union.
Fairly frequently, the three nations have viewed their respective interests as being too divergent to reach a comfortable compromise and instead are resorting to taking unilateral action.
Interestingly, Belarus itself behaves in a similar fashion towards several Ukrainian imports that it views as a real hazard to its domestic industries.
Russia’s authorities had warned their Ukrainian counterparts that they would resort to serious protective policies if the latter decided to sign the Association Agreement long before Kyiv’s Maidan happened. Presumably, those warnings may explain Viktor Yanukovych’s decision to not sign the agreement at the Eastern Partnership Summit in Vilnius back in November 2013.
When the newly elected Ukrainian President Petro Poroshenko declared that he would sign the economic part of the Association Agreement immediately after his inauguration, the issue returned to the Kremlin’s agenda. The Russian government raised it with Belarus and Kazakhstan, its Eurasian Customs Union (ECU) partners. At a meeting of the Eurasian Economic Commission on 23 June in Russian Sochi, the ECU’s supranational body, Russian officials suggested putting forth a collective response to Ukraine’s decision.
They argued that the Association Agreement threatens producers and manufacturers from the Eurasian troika. The Deep and Comprehensive Free Trade Agreement (DCFTA), the economic part of the Association Agreement, stipulates that Kyiv should remove its import duties on goods from the EU.
Ukraine is also a member of the Commonwealth of Independent States’ (CIS) region of free trade. Ostensibly, Russia fears that cheap European goods, disguised as Ukrainian goods, will flood the ECU’s markets and, thus, bankrupt less competitive producers in Belarus, Kazakhstan and Russia.
However, this argument has failed to convince Moscow’s allies. In the words of Belarus’ representative to the Council of the Eurasian Economic Commission Siarhei Rumas, Belarus and Kazakhstan “strongly reject” the proposal.
According to Rumas, the consequences of Ukraine signing the Association Agreement for the ECU’s economies remains unclear as the Eurasian Economic Commission has yet to analyse them. Under these circumstances, Belarus sees no “urgent need to adopt such a decision”.
As a result, however, Russia must invoke a special clause from the CIS free trade treaty and introduce its protectivist measures unilaterally.
Own Interests First
By rejecting Russia’s proposal, Minsk again demonstrates that its space to manoeuvre in its relations with Russia and remains resolute in using it to protect its own interests. It is abundantly clear now that one of Belarus' national interests includes maintaining good relations with Ukraine.
In 2013, Ukraine was Belarus’ third largest trading partner, following Russia and the EU. It accounted for 7.8% of the country’s foreign trade. Crucially, Minsk had a sizable trade surplus with Ukraine amounting to around $2.1bn.
Given the country's worsening economic situation and its traditional problems with its current and foreign trade accounts, the Belarusian authorities are actively looking for ways to minimise the negative repercussions of the crisis in Ukraine on their bilateral trade.
Minsk would be happy to re-export Ukrainian goods to Russia Read more
Supporting Russia’s sanctions against Kyiv would exclude such a possibility. Moreover, Belarus would be happy to use the ongoing trade tensions between Russia and Ukraine to bolster its own position. For example, Minsk would be happy to re-export Ukrainian goods to Russia.
Similar events unfolded after the Russia-Georgia War in 2008. When Moscow banned Georgia’s imports, certain Georgian goods (for example, its staple wine and mineral water exports) started entering Russia via Belarus.
Therefore, instead of aligning itself with Russia’s policies, the Belarusian Foreign Ministry emphasises that it considers Ukraine’s decision to sign the AA with the European Union as “the sovereign right of a sovereign nation”.
Belarus Says No to Ukrainian Sweets and Beer
At the same time, Belarus’ government feels free to take the liberty of introducing its own restrictions on trade for certain imports from Ukraine that it perceives as a threat for domestic producers. Recently, both beer and confectionery products from Ukraine have been denied entry to the Belarusian market.
In May, the Council of Ministers adopted a decree that obliges confectionery importers to obtain one-time incentives. In order to acquire the licenses, importers need to set very high prices, prices so high that they automatically make their goods uncompetitive on the Belarusian market.
The decree does not name Ukraine specifically. It does, however, appear to be the primary target. According to the Ukrainian Confectionery Industry Association, Belarus’ authorities have begun to ask the importers of sweets from Ukraine to increase their prices and even blocked their deliveries a month before the decree’s adoption.
As a result, most Ukrainian confectionery producers have had to abruptly stop exporting their goods to Belarus. Similar developments have affected beer imports from Ukraine as well.
Unlike Moscow’s proposal to take collective, union-wide measures, the Belarusian government is much more concerned about its own domestic preferences when considering which Ukrainian imports to curb – a decision that has nothing to do with Kyiv’s decision to sign the Association Agreement.
In his 22 April 2014 State of the Nation address, Lukashenka proclaimed that the development was a top priority of what he called a new economic policy. Ukrainian confectionery and beer imports simply fell victim to the Belarusian government’s understanding, or lack of it, of how an internal market should develop.
It should be noted that Minsk did not even bother consulting with its ECU partners before introducing the restrictive measures.
Model for Decision-Making in the Eurasian Economic Union
Unilateral actions are likely to dominate sensitive decision-making issues in Eurasian Economic Union's future Read more
The unilateral actions by both Moscow and Minsk suggest that a similar model will dominate sensitive decision-making issues in Eurasian Economic Union's future. Belarus and Kazakhstan's refusal to support Russia’s sanctions against Ukraine shows that the Kremlin lacks the ability to force its ECU allies into full political and economic compliance.
Belarus’ unilateral moves against Ukrainian beer and confectionery products implies that it does not take Eurasian regulations and supranational institutions very seriously.
This would appear to be a more or less natural state of affairs for an economic union that embraces authoritarian political regimes, each of whom are racked with difficult mixtures of contradicting economic problems and political concerns and ambitions.
In this light, Eurasian integration will likely face one of the two scenarios. Either Russia will have to pressure its allies into better compliance or the integration dynamics will gradually erode to reflect one of the more amorphous forms of the post-Soviet integration – something akin to the CIS and the Union State of Belarus and Russia.
Belarus’ Three Independence Days
Although many question whether Belarus is really an independent state today, its three independence days paint a different picture.
Depending on one's political views, Belarusians consider either 25 March, 3 July or 27 July as their real day for commemorating their independence as a nation.
On 27 July, Belarusian civil society activists and journalists symbolically celebrated the third of these independence days – the 24th anniversary of the Declaration of Belarus' Sovereignty in 1990. Two decades ago it was essentially the main official holiday for the young nation.
This year the authorities organised a bloated, pompous celebration of the Belarus Independence Day on the 3rd of July. Hundreds of thousands of Belarusians came out to watch a military parade in Minsk for the capital's official Independence Day celebration for the duration of Lukashenka's reign.
The opposition, however, believes that the 25th of March is the nation's real independence day, as it was the day when the Belarusian Peoples Republic was founded in 1918.
Official Independence Day – 3 July
The authorities only recognise and celebrate 3 July as the nation's official Independence Day, also known as the Day of the Republic.
Every year they commit substantial financial and human resources towards its preparations. This year they wanted to make it an especially notable commemoration as it would mark the 70th anniversary of Minsk's liberation from Hitler's Nazi forces.
This year Russian president Vladimir Putin came to Minsk right before Belarus' Independence Day to open with his Belarusian counterpart a new Museum of the Great Patriotic War.
This joint opening of the museum was meant to demonstrate the historical and political unity of both countries. Perhaps due to him having slightly different views about Belarusian independence on the eve of Belarus' Independence Day parade, Putin quietly made his way back to Moscow.
As the independent newspaper Naša Niva reported, around 200 thousand people gathered to watch the traditional military parade held on 3 July. Moving the time of the parade from its traditional morning schedule to the evening may help to explain the record turn out this year.
The parade proceeded through the city centre with military vehicles bearing not only Belarus' official red-green flags, but also Soviet and Russian flags.
Lukashenka typically avoids speaking Belarusian Read more
Lukashenka typically avoids speaking Belarusian, and is known to ridicule those who do so, but on 1 July he surprised many by delivering part of his speech in Belarusian.
He spoke about the unity of the Belarusian nation and the universal consensus held among its people in support of its sovereignty. He also emphasised Belarus' independence and the historical links of Belarus with the Soviet Union, calling the victory over the Nazi forces "our victory".
Justifying the choice of making 3 July a national holiday, he said that Belarusians themselves had decided to “restore this historical connection” when they voted for this date as Independence Day in a nationwide referendum in 1996.
Declaration of Sovereignty – 27 July
Prior to 1996, Belarus celebrated its independence on 27 July. After the dissolution of the Soviet Union, the Belarusian parliament passed its Declaration of Sovereignty on 27 July 1990. The 1995 referendum organised by Lukashenka was responsible for changing the timing of Independence Day.
In this referendum, one of the questions suggested moving Independence Day from 27 July to 3 July. According to officially reported results, nearly 90% of voters came out in favour of changing the date. The West, however, did not recognise the referendum’s results due to what they stated were multiple election violations and widespread vote rigging.
Since then, the state media and authorities have been silent about 27 July. For example, last year although Belarus' state Channel 1 journalists covered extensively the preparations and celebrations of the 1025th anniversary of the baptism of Kievan Rus, they did not say a word about the Declaration of Sovereignty. This year the anniversary also went unnoticed.
Some opposition-minded Belarusians try to commemorate the anniversary of the Declaration of Sovereignty of Belarus on their own.
Last year on 26 July 2013, just a day before the anniversary, the young activists from the movement "Alternativa" (Alternative) tried to wave the traditional Belarusian red-white-red flag on a bridge in the centre of Minsk.
The police, however, prevented them from doing so and eventually arrested them for their illegal unsanctioned political act. In the past the opposition has organised meetings, but few people attend them.
The Declaration of Sovereignty of Belarus clearly refers to the end of a particular epoch in history, one that remains uncomfortable for the current neo-Soviet political rhetoric, and hence their avoidance of the topic.
Freedom Day: 25 March
Belarusian opposition and many diaspora groups consider Freedom Day, which falls on 25th of March every year, as the most important day for commemorating the iedependence of the Belarusian state. This date marks the proclamation of the Belarusian Peoples Republic (Bielaruskaja Narodnaja Respublika or BNR) in 1918.
The BNR existed for only a few months, as the Communists subsequently crushed and destroyed it. Its leadership moved into exile. Ivonka Survilla has served as the President of the BNR’s Council since 1997, an organisation which primarily consists of Belarusian diaspora.
For supporters of recognising Independence Day on 25 March the proclamation of the BNR signifies the first properly independent example of Belarusian statehood.
without the BNR neither Soviet Belarus and nor contemporary Belarus would have ever seen the light of day Read more
According to an article recently published in the Journal of Belarusian Studies, many historians believe that without the BNR neither Soviet Belarus and nor contemporary Belarus would have ever seen the light of day.
Celebrations surrounding Freedom Day in Belarus take place primarily in opposition-focused centres and media, while the official channels of communication disregard it outright or distorts its image. This year, for example, Freedom Day coincided with the turbulent events unfolding in Ukraine and was used as fodder to dissuade people from making Belarus like Ukraine.
Opposition activists organised a rally throughout Minsk and brought not only white-red-white flags (unrecognised by the state), but also Ukrainian flags. In the 1990s public rallies on 25 March gathered tens of thousands of Belarusians, but now they draw considerably smaller numbers.
To discredit the opposition, state media accused those who celebrate the declaration of the BNR of being supporters of the Ukrainian banderovcy (the Ukrainian nationalists from WWII who fought against all sides in the war).
The government conveyed a very negative message: those who celebrate the 25 March Freedom Day are trying to launch their own "maidan" in Belarus, and these same people are the “successors of the Nazis".
According to a 2009 survey conducted by the Belarusian Institute of Strategic Studies and the Novak Laboratory, 57% of respondents considered 3 July as Belarus' primary national holiday. The 27 July and 25 March received only 1% of support of respondents of that survey.
As Aliaksandr Klaskouski on Naviny.by noted 25 March, celebrated by the opposition, remains foreign to many Belarusians. Most of them know little about its pre-war history.
By promoting the Soviet era and nearly ignoring the rest of Belarusian history, the country has become more vulnerable to an increasingly assertive Russia.
Hopefully the country's president speaking in his native language on the Independence day will become the first step in helping Belarusians reclaim their rich history and culture.