Russia, Belarus and Kazakhstan have agreed to set up a full-fledged economic bloc that should act as a bridge between Europe and Asia and a counterweight to Western integration unions.

The Presidents of the three countries signed the Eurasian Economic Integration agreement on Thursday in the Kazakh capital of Astana.

When the Eurasian Economic Union comes into force on January 1, 2015, it will create a market of 170 million people, with a combined annual GDP of $2.7 trillion and a quarter of the world energy resources.

“Russia, Belarus and Kazakhstan have elevated their cooperation to a fundamentally new level, creating a common market with free movement of goods, services, capital and workforce,” Russia’s President Vladimir Putin said at the signing ceremony. “The ‘troika’ states will conduct a coordinated policy in the energy sector, industry, agriculture and transport.”

The establishment of the Eurasian Union crowns Mr. Putin’s decade-long efforts at re-integrating the post-Soviet states, but the conspicuous absence of Ukraine at the table in Astana marks his failure to draw the second largest economy of the erstwhile Soviet Union into the new bloc.

Ukraine has opted in favour of integration with Europe, with its newly-elected President Petro Poroshenko planning to sign an association pact with the European Union soon after his inauguration. The refusal of ousted President Victor Yanukovych to sign the pact triggered a major crisis and civil conflict in Ukraine.

Armenia is to join the Eurasia Union next month, and Kyrgyzstan and Tajikistan are next in line for admission.

India, along with Vietnam, New Zealand, Turkey, Israel and a number of other countries, have expressed a desire to sign free trade pacts with the Eurasian Union.

Mr. Putin said agreement was reached in Astana to set up “expert-level groups to work out preferential trade regimes with Israel and India.”

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