Agreement signed establishing Eurasian Economic Union

Agreement signed establishing Eurasian Economic Union

ASTANA -- The presidents of Russia, Kazakhstan and Belarus signed an agreement on Thursday establishing the Eurasian Economic Union.

"It will will compete with the economic power of the U.S., EU, and China," said media reports.

The signed agreement will come into force on June 1, after it is approved by parliaments of the three former Soviet republics, according to Reuters.

"Our meeting today has special, without exaggeration, historical significance," said Russian President Vladimir Putin in Kazakhstan's capital Astana, and also denied that the newly formed Union aims to re-create the Soviet Union which collapsed in 1991.

The president of Kazakhstan, Nursultan Nazarbayev, said the new union is seen as a "bridge between East and West."

The new organization will have a total population of over 170 million and gross domestic product (GDP) of about USD 2.7 trillion. Both Kazakhstan and Russia are oil producing countries, and this agreement will only further deepen the previously established connections between them, according to reports.

The signed agreement guarantees free transit of goods, services, capital and labor, as well as coordinated measures in major economic sectors.

Ukraine has decided not to join the union after the ouster of its pro-Russia oriented president in February, and the deterioration of relations with Moscow after its peninsula of Crimea joined the Russian Federation.