Does the EAEU Have a Future?
On 29 May Nur-Sultan, the capital of Kazakhstan, will host leaders of the Eurasian Economic Union (EAEU) at a summit to mark the 5th anniversary of this organization. The fact that this meeting will take place in the capital of Kazakhstan is quite symbolic, as the treaty to establish this union was signed in this very city.
The Eurasian Economic Union (EEU/EAEU) is an international organization aimed at regional integration, which was established on signing the Treaty on the Union. It guarantees freedom of movement for goods, services, capital and workers, and promotes the use of aligned and coordinated economic policies. The Eurasian Economic Commission (EEC) is a permanent supranational regulatory body whose purpose is to ensure favorable conditions for the EAEU, the Eurasian Customs Union and the Eurasian Single Economic Space to operate and develop in, and to generate proposals aimed at integrating countries within these organizations.
Member States of the EAEU include Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. On 14 May 2018, Moldova became an observer member of the EAEU. And approximately 50 nations have expressed their willingness to cooperate with the Eurasian Economic Union.
It is well known that Russia accounts for 88% of the Eurasian market (comprised of Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan). Access to the Russian market is a key draw for EAEU partners. Undoubtedly, Russia’s role within this organization is crucial, as the nation was the backbone of the Soviet Union and still remains a vital support structure in the region.
However, it is not without reason that Russia refuses to follow in U.S. footsteps, as it does not wish to establish its supremacy over the rest of the world by forcing it into obedience. By consolidating the EAEU, the Russian Federation aims to avoid mistakes made by the United States and the EU, which have been building international relations on the basis of dictatorial rules that often run counter to national interests of their allies. Russia does not expect political loyalty from EAEU Member States and partners, only economic cooperation. After all, in the end, shared economic interests will sooner or later lead to joined decisions in the political and military spheres. And such alliances will only be more resilient if they stem from each party’s willingness to join rather than pressure from Moscow.
Russia chooses to set realistic aims for its socio-economic development, and it is fully aware that its market is small for the current world powers, such as the EU, China and the USA. But it is highly attractive for the Commonwealth of Independent States (CIS) as well as Turkey, Iran, Mongolia, Syria, Tunisia and a number of other nations, which are either Member States of the EAEU or are awaiting membership in the organization. Undoubtedly, Georgia and Ukraine could have joined their ranks, but instead, they have chosen another path and are currently reaping its bitter fruit.
The EAEU, which will celebrate its 5th anniversary, is not just a theoretical project. It is essential for all the Member States. These nations joined the organization because of economic factors. Sustained and painstaking efforts to make this initiative work are ongoing, and there is every reason to believe that they will bear fruit. To date, the Common Customs Tariff (CCT) initiative can be viewed as a major achievement for the EAEU, and so is the fact that the CCT will be governed on a supranational level by the EEC.
Since the EAEU (a regional organization) is mainly focused on facilitating movement of goods and services, manufactured and provided by the Member States, within and outside the EAEU, the union needs to accomplish a number of key tasks. At present, increasing the competitiveness of its Member States in the global market, within the framework of the norms and rules set out by the World Trade Organization (WTO), is a priority for the Single Economic Space. It is certainly worthwhile to harmonize and bridge the gap between integration processes taking place in the Euro-Atlantic Region and those in Eurasia. Hence, one of the most important tasks for the EAEU in the nearest future is preparation of antidumping agreements on key export products for its Member States to eliminate direct competition between them on external markets, as it will be vital for the EAEU nations to retain their positions in these markets. These agreements, which are to be drawn up using a negotiation model, may lay the groundwork for the initial phase of creating an expanded agreement on free trade and investment integration.
In order to resolve issues related to economic development of the EAEU, it is also essential to involve top new experts in the Eurasian integration process, and to ensure at least medium-term or better yet long-term joint economic planning within EAEU nations, which should be based on a realistic assessment of ongoing economic and political processes. The aim is to establish a new consensus on strategy governing the integration processes.
Russia supports development of regional cooperation and integration, and it sees substantial benefits in not only improving and consolidating the EAEU but in creating a single space, “Big Eurasia” which will encompass the European Union, the Eurasian Economic Union and various Chinese integration initiatives. The “Big Eurasia” concept entails the creation of a single economic space on the Eurasian continent, with interests in North and East Africa, the Pacific Ocean islands, and even Indonesia and Australia.
Integration means the need to improve relations not only with the Members States of ASEAN (the Association of Southeast Asian Nations) and of the SCO (the Shanghai Cooperation Organisation) but also with the nations of the European Union. Since up until recently the EU was a key partner of the Eurasian Union. For the very first time last year, trade with Asian nations (according to indicators) exceeded that with the European Union. Still, the EU remains the EAEU’s main trading partner, it is, therefore, essential to establish normal means of cooperation, first and foremost, aimed at creating comfortable conditions for all the market participants. We are primarily referring to standards, technical guidelines, regulations and antidumping investigations that are being conducted nowadays.
A larger version of the EAEU (once nations awaiting membership join the organization) will be a single economic space covering territories from the Barents Sea to North Africa. Hence, the union is in the process of becoming a very attractive market that includes a population of up to 600 million people. And this is the way the “Big Eurasia” puzzle is coming together at present.
Valery Kulikov, expert politologist, exclusively for the online magazine ‘New Eastern Outlook’.