Ten Years of the Establishment of the Eurasian Economic Union

May 29 is the EAEU Day, because it was on this date in 2014 in the capital of Kazakhstan, Astana, that the signing of the Treaty on the Establishment of the Eurasian Economic Union by the presidents of Russia, Belarus and Kazakhstan took place. On January 1, 2015, the three states were already officially in the new union, with Armenia joining the next day and Kyrgyzstan in August. Until now, all five powers are in the EAEU. In the year of the decade since the establishment of the organization, the Republic of Armenia, which is now experiencing social and political upheaval, is the chair.

If we look at the historical retrospective, the timing of the creation, or rather the transition from the EurAsEC and the Customs Union to a more closely integrated union, was quite difficult. Ukraine, which was considered a candidate for membership in the EAEU as early as 2013, experienced a coup d’état in February 2014. After the referendum in Crimea and its return to Russia, our country was hit by sanctions from the U.S. and Western countries.

The first sanctions were imposed on March 17, 2014, and new ones have been introduced all the time since then. Their volume has now reached a record high compared to other countries.

On May 2, 2014, in Odessa, neo-Nazis, supported by the authorities, massacred and set fire to the Trade Union House, resulting in numerous civilian casualties. This was a clear signal of the point of no return. On May 11, 2014, referenda were held in the Donetsk and Lugansk People’s Republics on independence from Ukraine.

Undoubtedly, the United States was behind the process of Ukraine’s negative transformation. And the facts show that the coup was initiated precisely to prevent Ukraine from joining the EAEU. Hillary Clinton as US Secretary of State back in 2012 tried to criticize Eurasian integration trends, calling them attempts to recreate the USSR. “We are trying to find an effective way to slow down or prevent this process,” Clinton said at the time.

On November 29, 2013, Viktor Yanukovych refused to sign an agreement with the EU at the Eastern Partnership summit in Vilnius. In December, he signed the Russian-Ukrainian action plan, which envisioned a reduction in natural gas prices and Russia’s purchase of Ukrainian Eurobonds. But this plan never materialized. Ukraine was already engulfed in protests, where American emissaries were adding fuel to the fire.

Nevertheless, the EAEU has been established and is functioning. The Union is open for accession to any state that shares its goals and principles, on terms agreed by the member states.

The EAEU applies the Single Customs Tariff, unified customs regulation and administration, free movement of goods between the territories of the member states without customs declaration and state control (transport, sanitary, veterinary and sanitary, quarantine phytosanitary) except in cases provided for by the Treaty.

Within the Union, a common foreign trade policy is implemented (conclusion of agreements with third countries is possible only on behalf of the EAEU and its member states), common technical regulation is implemented, common sanitary, veterinary-sanitary and quarantine phytosanitary measures are applied. In addition, the “five” countries pursue a coordinated macroeconomic, industrial, agro-industrial, transportation policy, and work on the formation of a common digital space. A common labor market also functions on the territories of the Union’s member states.

On May 14, 2018, the Republic of Moldova received the status of an observer state to the EAEU, and on December 11, 2020 – the Republic of Uzbekistan and the Republic of Cuba.

In addition, free trade zones are in place with Vietnam, Serbia and Singapore, and negotiations are underway with a number of other states. The most active negotiations are underway with the Islamic Republic of Iran. The Russian and Iranian sides are optimistic about the results achieved.

In 2016, the decision of the Supreme Eurasian Economic Council, “On the beginning of negotiations with the Arab Republic of Egypt on the conclusion of a free trade zone agreement” was adopted. Six rounds of negotiations have been held so far.

On December 9, 2022, the Supreme Eurasian Economic Council adopted a decision to start negotiations with the United Arab Emirates on the conclusion of a free trade agreement. Two rounds of negotiations have already taken place in 2023 (on this issue.

It may seem strange that Syria is absent from the list of Arab states that are interested in establishing some kind of special treatment with the EAEU. This is probably due to the continuing conflict in this country. Although in July 2015, during a ministerial meeting in Damascus, Syrian Prime Minister Wael Al-Halki said that negotiations were underway with Russia to join the Eurasian Economic Union and the free economic zone. He said, “We consider it a boon and a strengthening of relations. We intend to develop trade cooperation.” Since Russia and Syria are allies and, in addition, Syria is home to a large number of Armenians, this stimulates mutual interest in EAEU integration.

In September 2017, Jordan signed a Memorandum of Understanding with the Eurasian Economic Union to promote and diversify trade between Jordan and the Eurasian Economic Union. And Morocco and the Eurasian Economic Union signed a memorandum of cooperation to strengthen economic relations and interaction in Rabat on September 28, 2017, indicating that EAEU countries view Morocco as a reliable partner and gateway to Africa and other regions with which the Kingdom has close relations.

On October 17, 2022 in Riyadh, Saudi Arabia, Armen Arutyunyan, Director of the Agro-Industrial Policy Department of the Eurasian Economic Commission, and Maxim Protasov, Head of Roskachevo, met with Ahmed Saleh Ayad Al Hamshi, Deputy Minister of Environment, Water Resources and Agriculture of the Kingdom of Saudi Arabia. The parties discussed a wide range of issues of mutual interest, including the development of organic agriculture, ensuring food security, sustainable development of the agro-industrial complex in the context of climate change and others. They considered proposals to elaborate an international treaty between the EAEU and Saudi Arabia on the equivalence of organic agriculture systems to ensure free trade in organic products, to create a platform on the basis of the Commission to attract investments, to promote agricultural products and food produced in the EAEU on the markets of third countries.

In 2023, the interest of the EAEU and Saudi Arabia in expanding cooperation was confirmed. In general, Saudi Arabia is consistently ranked among the 15 largest consumers of EAEU agro-industrial products. According to data for 2019, in 2018, Saudi Arabia ranked 12th among all partner countries in terms of agricultural imports from the EAEU, with the best result (9th place) observed in 2012 and 2015.

The best result of the United Arab Emirates was 17th place (in 2017) among all partner countries to which the EAEU exports agricultural products, while Iraq had the 25th place (2015 and 2016). The remaining countries were among the top 100 buyers from the EAEU in 2018 (Oman 54th, Qatar 75th, Kuwait 93rd), with the exception of Bahrain (114th in 2018).

Insignificant volumes of agricultural products are imported from the Gulf countries. Thus, in 2018, the UAE ranked 75th among the countries – suppliers of agricultural products to the EAEU, Saudi Arabia – 121st, Oman – 162nd, Kuwait – 172nd, Bahrain – 176th. Iraq and Qatar did not supply agricultural products to the EAEU in 2018.

This indicates that these countries are more interested in receiving agro-industrial products from the EAEU, as they lack certain agricultural products due to the hot climate.

It should be noted that Arab economic and political analysts provide statistical data on the degree of progress achieved in the countries of the Eurasian Economic Union due to Russia’s contribution to the development of the region.

Undoubtedly, the main factor of other countries’ interest in interaction with the EAEU is the optimization of tariffs and mechanisms of trade and economic interaction through the creation of free trade zones and other special regimes.

Secondly, it is the same logistics, as Russia has now intensified a number of regional projects, such as the Northern Sea Route and the North-South international transportation corridor (it is worth recalling that in August 2023 the first train was sent from Russia via Iran to Saudi Arabia).

Third, these are joint investments and common projects. Since we are talking about a supranational association, through its structures it will be much easier to protect their capitals from undesirable political influence (which the U.S. and its satellites will try to do).

Fourth, there is the risk of increasing the toxicity of the dollar as a reserve currency. A number of foreign countries, possessing such assets, will want to diversify their investments, which can be done through new venture funds together with the EAEU or some innovative initiatives.

There is also an opinion that the purpose of participation in the EAEU may be different, so each country may receive different preferences depending on its participation and capabilities. It should be noted that the EAEU and China’s Belt and Road Initiative are still being linked, so this vector may also be of interest to other actors.

While it is tempting to wait and see what happens in the face of global political turbulence, it is clear that Russia retains a very strong position and that de-westernization has led to a transition to a new economic policy that is showing success. As the strongest member of the EAEU, Russia will seek to support its partners in the union, and this may be another good incentive for those who are still undecided about participation in the EAEU.

Of course, we need to look realistically at the processes taking place and adjust the agenda. Thus, based on the plans outlined earlier and the results achieved, we can analyze what needs to be done in the first place, what needs to be adjusted, and what makes sense to abandon altogether.

In December 2022, the Strategy for the Development of Eurasian Economic Integration until 2025 was signed in Minsk. If we compare theoretical calculations with practical solutions that have been implemented in a year and a half, we still need to work on the creation of joint financial and industrial groups and Eurasian transnational corporations. Especially for high-tech projects. Due to the sanctions on the Russian banking system, the launch of a common financial market is still far from being realized.

According to the Eurasian Economic Commission, the share of settlements in Russian rubles in the EAEU in 2023 rose to 81.3%. Over 10 years, this indicator has increased by 14%. The share of settlements in tenge also increased significantly – from 0.5% to 2.7%. At the same time, the share of settlements in U.S. dollars fell by 15% and now amounts to 11%. So the process of leaving the toxic currencies of dollar and euro continues.

The benefits of a common financial market should be felt by all citizens: so that “Mir” cards function throughout the EAEU and there are no problems with money transfers.

Access to public procurement is also an important topic that has not yet been resolved. Since there is still state protectionism in this area, which hampers mutual access of enterprises and companies of the EAEU countries to national public procurement systems and, consequently, to public procurement.

And some provisions, such as establishing a dialog with the EU and the European Commission, may need to be abandoned. The years of the SWO have shown what the current political elite in the EU represents. And the July 2014 elections to the European Parliament are unlikely to fundamentally change the situation. The same can be said about the OECD and the WTO, which are blatantly Western creatures. Conversely, deepening cooperation with ASEAN, the SCO, Mercosur, the African Union and other non-Western organizations should be stimulated and encouraged in every possible way.

Looking back, of course, it is important to correctly assess the mistakes made. It is no secret that the EAEU was modeled on the EU. However, a number of nuances were not taken into account. For example, ideology. Initially it was stated that the EAEU would pursue exclusively economic goals. But how can we talk about full-fledged integration if culture, identity, worldview, historical traditions and the same policy are not taken into account? Multi-vectorism can lead to the tearing of the country, as it happened in Ukraine.

Since all EAEU members were previously in a single space (the Russian Empire, then the USSR), there is a significant difference from the EU countries. In fact, we have reintegration, where all members retain their full sovereignty, and, in addition, according to the EAEU Charter, all decisions of the Supreme Body are taken by consensus. This is a big plus compared to the EU, where its members lose their sovereignty and everything is managed by European commissioners from Brussels.

It is, of course, about a new type of ideology for the EAEU, where we should avoid hackneyed political stamps and theories that have shown their failure. The development of such an adequate ideology, which would be actively demanded by all EAEU participants as a long-term and attractive strategy, is still necessary.

Source

https://www.geopolitika.ru/en/article/ten-years-establishment-eurasian-economic-union