Will Karabakh “Join” Russia’s Customs Union?

Armenia has made its choice between the two EUs --  the European Union and the Eurasian Union-- but will it bring its de-facto addendum, the breakaway territory of Nagorno Karabakh along with it into the Russia-plus trade space? Some analysts believe that Karabakh will indirectly end up enjoying the benefits of the Kremlin’s economic promised land.

Bent on taking the territory back, Azerbaijan poses a stumbling block for the predominantly ethnic Armenian territory to reach out to the outside world; meaning that Armenia is essentially the only friend and trade partner Karabakh has.

In turn, since Russia is the main economic partner for semi-boycotted Armenia, Karabakh by default is expected to gain access to the economic zone coalesced around Moscow, some Armenians believe.

“Armenia and Nagorno-Karabakh form one economic space,” Alexander Iskanderian, director of the Yerevan-based Caucasus Institute, told Russia’s Gazeta.ru. “Armenian money works in Stepanakert, the banking system and laws are closely integrated."

Officially, of course, it will not be a union of Russia, Belarus Kazakhstan, Armenia and Nagorno Karabakh. Not even Armenia has recognized Karabakh as an independent state.

Nor, with all members of the union, Russia included, wary of angering Azerbaijan, the formation of the Eurasian Union is not going to change the diplomatic status quo for Karabakh.

But, as often happens in the Caucasus, it's what happens apart from what's written that counts. Some observers expect that Karabakh's produce, be it mulberry brandy or construction materials, could be sold customs-free within the union as products of Armenia. “Nobody is going to put customs checkpoints between Karabakh and Armenia,” said Viktor Yadukha, a Russian commentator. “Karabakh will de-facto join the customs union,” he told Azerbaijan's Vesti.az news site.