Leaders of Russia, Belarus and Kazakhstan on Thursday signed an agreement to create the Eurasian Economic Union, an alliance intended to further boost economic and trade ties between the ex-Soviet neighbors.
Russian President Vladimir Putin said during talks in Kazakhstan's capital, Astana, that the pact is taking their cooperation to a "new level," while fully respecting their sovereignty.
Putin said the new union will help provide an "attractive center of economic development" and allow the three nations to exploit their economic potential and strengthen their positions in global markets.
The new alliance is the development of the Customs Union including the same nations. In addition to free trade, it coordinates the members' financial systems and regulates industrial and agricultural policies along with their labor markets and transport systems.
The deal stops short of introducing a single currency and delays the creation of a common energy market.
The signing followed years of tense negotiations, and many differences have remained.
Moscow will host the top executive body of the new alliance. Its high court will be based in Belarus, and the top financial regulator will be located in Kazakhstan.
Belarus' authoritarian President Alexander Lukashenko, who has depended on cheap Russian energy and other subsidies to keep the 10-million nation's Soviet-style economy afloat, said before the signing he wasn't fully happy with the deal, but hailed it reflected a mutually acceptable compromise.
Kazakhstan, led by autocratic President Nursultan Nazarbayev, is the second largest country by territory and economy among the ex-Soviet nations. Nazarbayev has maneuvered between Russia and the West during more than two decades in power. But Russia has little leverage over Kazakhstan, whose energy riches and booming economy make it an equal partner.
Nazarbayev said the new pact is based on consensus. "The agreement is well-balanced and thorough, taking into accounts the interests of all its members," he said.
He voiced hope that the new alliance "will become a powerful incentive for modernizing our economies and helping making them global leaders."