ASTANA (Reuters) - The Russia-led Eurasian Economic Union (EEU) is starting negotiations on a trade deal with China, officials said on Tuesday, and aims to forge an agreement within two years.
Comparing the planned deal to the proposed EU-US Transatlantic partnership agreement, Igor Shuvalov, Russia's First Deputy Prime Minister, said the talks would be very difficult.
Shuvalov told reporters in the Kazakh capital Astana that the decision was taken by the presidents of member states and former Soviet republics Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan who met in Kazakhstan.
Shuvalov said Beijing wanted the EEU to cut customs duties on Chinese goods or even remove them completely, but no decision has been taken within the bloc on whether to do so.
"We will work on this matter in order to ensure the balance of mutual interests," he said, adding that negotiators would first focus on non-tariff barriers.
Russia and Kazakhstan, the two biggest economies in the EEU, mostly supply commodities such as oil and metals to China and import goods ranging from textiles to cars and electronics. Another major oil exporter, Iran, "could potentially become a member of such a partnership", Shuvalov said.
Kazakh President Nursultan Nazarbayev said at the meeting the EEU, which has already signed a free trade deal with Vietnam, was also interested in cooperation with India, Israel, Egypt and Cambodia.
"Free movement of goods and services within the union is in line with the Silk Road Economic Belt initiative put forward by the Chinese leadership," he said.
But Belarussian President Alexander Lukashenko urged his partners to resolve the internal issues of the bloc set up two years ago such as numerous - about 600 - exclusions to its free trade rules.
"Equal conditions for EEU members and an environment free of barriers have still not been created," he said. "Moreover, since the agreement has been signed, our internal trade turnover has only been declining."
Trade turnover within the bloc fell to $45 billion in 2015 from $65 billion a year in 2012-13, Lukashenko said.
Trade between Russia and China was worth about $64 billion last year, compared with China's total foreign trade of about $3.8 trillion.
(Reporting by Denis Dyomkin and Raushan Nurshayeva; Writing by Olzhas Auyezov; Editing by Richard Balmforth)
