Jun 17, 2009

Life on Planet Belarus...Just Got Stranger

Last week, Russia proudly informed the WTO that, membership would be nice, but it really wanted to join the group as a customs union with Kazakhstan and Belarus; just one big happy free-trading family.

So what did our trade BFF’s do for an encore? Why Belarus chose to launch a bitter trade war, for starters.

“AP: Belarus has set up customs posts on its border with Russia for the first time in 14 years as a trade dispute between the two countries escalates...Belarus has not had customs posts on its border with Russia since 1995.”

By the way, anyone willing to take a quick read of the WTO’s rules on customs unions will notice “that the purpose of such agreements should be to facilitate trade between the constituent territories and not to raise barriers to the trade of other Members with such territories.” This is to prevent countries from using a customs agreement to raise trade taxes on other countries.

Strangly, the WTO doesn’t seem to have anticipated a scenerio whereby two countries would announce their intention to form a customs union for the purpose of actually raising barriers on each other. That would defeat the whole purpose of forming a customs union in the first place.

Not on planet Belarus.

1 comment:

Igor said...

Also worth noting that this is not winning Belarus a lot of brownie points in the West either. The White House just extended the US sanctions regime a few days back: