Ukraine: geopolitics is after drinking much

It seems that there is an obvious deficiency on clear-eyed politicians in literal sense of this expression in the Ukrainian establishment: the political club “Alternative” told convincingly about this unique distinctive feature of the Ukrainian political life. What to do, a little squirrel, misters...

Despite the New Year's and Christmas holidays, the information space during the period between Victor Yanukovych's cancelled visit to Moscow (on December 18, 2012) and expected visit of the Minister of Foreign Affairs of the Russian Federation Sergey Lavrov to Kiev (on January 14, 2013) was in many respects filled with the renewed geopolitical discussion. The Customs Union and Free trade zone were opposed each other within the Contract on Association of Ukraine with EU.

The position of the European optimists was stated more detailed by Sergey Terekhin in article “Full member. The note about rudeness and Customs Union”, published on a site “Economic Truth” (a portal “The Ukrainian truth”) on December 25, 2012. However, the imposing of pardonable Slavic weakness of Mr. Terekhin on a chain of roughly celebrated holidays, obviously affected the level and quality of the argument …

Let's say at once, the reasoning of the taken out from the liberal cabinet of curiosities of the 90th and reliably alcoholized Sergey Terekhin, stated by him in the article on Ukrainian Truth, don't stand the eaten-away egg. According to one simple reason: any objections against the entry of Ukraine in the Customs Union have to correspond to the main economic benefit from the introduction: sharp depreciation of energy carriers, first of all gas and oil.

The matter is that one of the fundamental principles of the Customs Union is equal availability of natural resources to its members. So, the gas price is formed on a formula: the price on a field plus transportation cost. Moreover, this principle was consolidated by the federal law of the Russian Federation establishing the gas prices for Belarus in a binding to gas price for the Yamal-Nenets Autonomous Area. For 2013 the price of the Russian gas for Belarus would be $166 for one thousand cubes (that, by the way, is cheaper, than for the Kaliningrad region), for 2014 year – $178. How advertising fairly calls in such cases – “feel a difference!”: the average price of the Russian gas for Kiev in 2013, put in the Law on the State budget, will make $421, i.e. is 2.5 times more expensive, than for Minsk. And after all the distance from Siberian “well” for Belarus and Ukraine is almost identical.

High gas prices are not only the considerable costs of the budget of its purchase in Russia, but it also huge expenses on grants for the population of tariffs of housing and communal services. But, first of all, it is a question of competitiveness of national economy. Last year, after the sharp reduction of price of the Russian gas (from $244 to $164), the balance of the foreign trade balance of Belarus has increased (January — November 2012 to January – November 2011) more than on $4 billion, having become positive. Besides, the inflow of currency revenue to the country increased almost for 12% for the same period.

As for the need to pay the export duty mentioned by Mr. Terekhin, it concerns exclusively the exported gas and the oil products made from the Russian raw materials. However, if the products made from the Russian raw materials, go on domestic market of the countries of the Customs Union, so there are no export duties. Thus in case of production export made from own raw materials, there are no export duties also. It allows Minsk to make replacement: to use production made from the Russian raw materials in domestic market and all production made from the Byelorussian raw materials to direct on export. Bright example: at the Ukrainian gas stations under the brand EURO-5, the gasoline of production of Mozyr Oil Refinery is on sale.

However, the Ukrainians perfectly see how across all Ukraine the trade benches and pavilions of “Byelorussian products”, “Byelorussian goods”, “Byelorussian cosmetics” grow. In a segment low prices / satisfactory quality” they restrict a domestic producer in our market. That isn't surprising, – for example, the energy carriers make 33-35% in cost of products of agrarian and industrial complex.

Sharp reduction of gas price isn’t mentioned at all in Sergey Terekhin's New Year's opus about such advantage of the Customs Union to Ukraine. Therefore, all his argument, according to the terminology of his boss on Cabinet 2005, should be carried in the category “cries and snivels” which in this case consist of the numerous facts and short conclusions not related in any way. In this regard we will dare to begin with the last.

As first “negative” from the entry of Ukraine in the Customs Union, Mr. Terekhin gives “Increase in cost of import industrial goods at least for 34%”. Here, in literal sense “you won't understand without a bottle” –from where this figure is undertaken??? But if, after Sergey Anatoliyevich “have a jag on” the same New Year's Eve dose, so the truth will emerge from a glass bottom. The matter is that in couple of paragraphs above Mr. Terekhin claims: condition of the entry of Ukraine in the Customs Union is the increase in the import duties on the average for 34% – from present 6.6% (according to conditions of the accession to the World Trade Organization) to 10.05%.

We won't begin to carp at figures which actually differ from given a little or to mention readiness of Moscow to lower a customs tariff in case of accession of Kiev to the Customs Union. We simply pay attention of all sober readers that the increase of the import duties at 34% will lead to the average growth of the price of import goods on … 3.2%. But it, at the same time, will raise the protection level of a domestic producer. And, once again we will remind that this growth needs to be correlated to falling of energy costs!

As to Mr. Terekhin, the person confusing the import duty with the cost of import goods, simply has no moral right to argue on the subject “why to finance the academic institutes like Geets's institute” (it is meant the Institute of Economy and Forecasting of the National Academy of Sciences of Ukraine headed by the academician Valery Geets who gave the positive forecast of the entry of Ukraine in the Customs Union). And Sergey Anatoliyevich could understand a question “why” personally – in 2005, being the member of Tymoshenko’s Cabinet who regularly got advice of the same institute headed by the same director.

The second “negative” of Terekhin from the entry of Ukraine in the Customs Union is even more fabulous: “Unemployment growth as by rules of the Customs Union, the persons from the Asian countries who now are based in Russia will arrive to Ukraine”. It seems that it was written not at a stage “rum – whisky – gin”. Here the east motives are clearly audible: “absinthe liqueur – opium – hashish” …

The rules of the Customs Union concerning the labour migration extend only on citizens of the countries of the Customs Union. And it is difficult to the sane person familiar with economic realities of the former Soviet Union to imagine the citizens of Russia, Belarus or Kazakhstan, in a mass order attracted with level of the Ukrainian salary. As a matter of fact, the today's directions of labour migration can’t change to the opposite from the entry in the Customs Union. They can amplify or be slowed down only a little.

As for the notorious “persons from the Asian countries”, so within the Customs Union “the Cooperation agreement on counteraction of illegal labour migration from the third states” acts. Finishing “Asian” subject, it is possible to remind that exactly Yulia Tymoshenko’s government signed the contract with EU on a readmission according to which the Asian illegal immigrants who have got to EU through Ukraine, are deported … back to Ukraine. And further Ukraine keeps illegal immigrants at own expense (according to standards of providing EU!) or at own expense sends them home. By the way, Moscow didn't accept such idiotic obligations before EU …

The third “negative” of Terekhin – “Rise in crime owing to increase in migrants from Russia” entirely follows from the second and therefore automatically gets to the category “no comments”.

As for the fourth “negative” from Terekhin, here it is a question already obviously of the pure chemistry which has finally oxidized earlier alcoholized cells of the brain: “Reduction of the income of Ukraine from the benefits of a geographical position of the main transit country between the Russian Federation and EU”. Actually, the entry of Ukraine in the Customs Union will sharply increase the income of Kiev from transit.

Why during the Customs Union existence the cargo traffic as a whole increased in 3.5 times through Belarus, and, in particular, in 8 times through Brest?! Because the western border of Belarus became the eastern frontier of the Customs Union and it became unprofitable to carry the cargoes to the Russian Federation and Kazakhstan and also back to EU to carry through Ukraine, crossing two customs instead of one!

Similar situation is with seaports. It is more favourable today to carry out the South – North transit through the Russian Black Sea ports for the above reason. Entry of Ukraine into the Customs Union will load the Ukrainian ports because the shortest way to the European part of Russia lies through them.

In principle, on the analysis of conclusions “from Terekhin” it would be possible to finish the analysis of this article because the “reasoning” part consists of the continuous lie diluted with improbable baizes. However, knowing the domestic tradition to borrow the foreign arguments by the elementary copying of quotes of “authorities”, we consider necessary for prevention to expose some most scandalous, though “mixed” cases of lie.

Small lie: “The community court (the Eurasian Economic community – a bus) is located EurAsEC in St. Petersburg and is guided by the norms of civil, administrative and criminal law which work in the court location, i.e. the right which works in the Russian Federation”. Actually the court of EurAsEC is located in Minsk, but it is guided not by the norms of the civil, administrative and criminal law operating in Belarus, but constituent and normative documents of EurAsEC.

Average lie: “It is interesting, what will be if the decision of the Customs Commission of Khristenko isn't apprehended by parliament of the country - member of the Customs Union?” Already it is more than a year – since December, 2011, the Commission of the Customs Union doesn't exist. There is the Eurasian economic commission, the Board structure of which includes 9 (nine) ministers – 3 (three) from each member state of the Customs union; all decisions are made jointly, and the sensitive questions – exclusively by consensus.

Thus all decisions of Board are the subject to the approval by Council of the Eurasian economic commission, where on 1 representative from each state enters (at the level of vice-premiers) and if necessary also the Supreme Eurasian economic council, at the level of heads of states. At these levels the decisions are also made by consensus!

Large lie: “Votes between member countries of the Customs union are distributed in the following way: the Russian Federation – 57%, the Republic of Kazakhstan – 21.5%, Republic of Belarus – 21.5%.”. The contract of the Eurasian economic commission of November 18, 2011 (article 7, section 1) accurately defined the principle “one country – one voice”, all decisions on sensitive questions are made only by consensus and thus any country has the right of the veto.

Outrageous lie: “The draft of the Customs Union is especially political”, and “Free Trade Zone doesn't assume the narrowing of the sovereignty of Ukraine”. That fact that the states with absolutely different political and economic systems enter (and invited) the Customs Union is the best evidence that the economic interests are at the centre of the Customs Union. Besides, the political conditions of staying in the Customs Union of the participating countries didn’t mention at all in any documents of the Customs Union.

And here the Free Trade Zone and EU which is part of the Contract on Association, just shows to Kiev a significant amount of requirements regarding the change of the national legislation and regarding the adjustment of the internal and even foreign policy.

Mean lie: “Free Trade Zone doesn't assume the withdrawals from the general customs regulations”. Meanness is that if to speak about an abstract free trade zone, so this statement is fair as a whole. But after all it is a question of a so-called Free trade zone with EU – within the Contract on Association. It assumes almost full opening of the Ukrainian market in exchange for “chink” in the EU market – cancellation of only tariff regulation. But non-tariff regulation is used “to the utmost”: so, the export of the Ukrainian agricultural products to EU will be rigidly set quotas, thus will be demanded high requirements to the quality of production.

However, to expect that the European Union making in the sphere of agrarian and industrial complex of production is 40% more than the volume of internal demand, will open the market for the Ukrainian landowners, is possible only on New Year's Eve after the 15th wine glass …

P.S. “Pearl scatterings”

Mr. Terekhin claims: “Kyrgyzstan and Tajikistan weren't allowed to participation in the Customs Union in connection with the small importance for the Russian Federation”. To deal with a situation, it is necessary to watch only the news and to navigate with a map. In December, 2012 Kyrgyzstan officially began the process of occurrence into the Customs Union (membership is planned since 2015) and Tajikistan can't physically enter before Kyrgyzstan – due to the lack of the general border with the Customs Union in present structure.
Mr. Terekhin reports that Otto von Bismarck told his well-known phrase “The Russians slowly harness, but quickly go” “on the eve of the First World War”. It is worth reminding that the Iron chancellor died in 1898 – exactly in 16 years prior to the First World War and the phrase was said about 20-25 more years earlier.

Besides, it is possible to assume that Sergey Anatoliyevich meant the Shanghai Organization of Cooperation by a mysterious abbreviation of “ShOSS” and the second “S” is a reflection of his inescapable fear in front of Asia.

By the way … The Tajiks live in Tajikistan, instead of the Turkmens (it is about the phrase “Hello, Kirghizes and Turkmens!” concerning Kyrgyzstan and Tajikistan) that, we hope, even Sergey Terekhin understands on the sober head …