Today, questions about the EAEU, what it is, what kind of power it can contain, are gradually finding their answers. Obviously, such seemingly stable international organizations as NATO and the European Union, a cohesive Western world, lead to a logical pullback of a similar force policy in the East. And Russia seeks to become the center of such forces, creating the EAEU, the union is called upon to generate not only economic growth, but also political weight.
Inactive CIS
EAEU - what is it? Formally, this is a young international association that personifies the eastern confrontation with Western monoliths. At the same time, the Eurasian Union is by no means a new idea; it was created on the basis of organizations that already existed, but proved to be ineffective. In principle, the first alliance in this territory can be considered the well-known CIS - the community of independent states, which for the most part was an inactive union with very little content.
The second organization in this space has become the Eurasian Economic Community. The idea of its creation was submitted by the President of Kazakhstan Nursultan Nazarbayev in 1994. For five years, partners have been looking for optimal solutions for the implementation of the new partnership. And in 2000, Russia, Kazakhstan, Belarus, Tajikistan and Kyrgyzstan signed a corresponding agreement, according to which the partnership entered into force in 2001.
Customs Union
One of the main issues of the EurAsEC was the discussion of creating a single customs space. As a result, at the beginning of 2010, the Customs Union began to work within the framework of the EurAsEC. The Union was created with the aim of enhancing trade integration, creating duty-free trade zones where goods exchange would not be accompanied by any economic restrictions. The union includes all the states of the EAEU, the formation of which has also been actively discussed since then.
The implementation of the single customs code, which was adopted and ratified by all participating states, was not cloudless. The conflict erupted between the Kremlin and Minsk, so much so that Vladimir Putin threatened the Belarusian leader that the union would begin without him. As a result, in April 2011, transport control on the Russian-Belarusian border was canceled. Given border and migration control, export from these countries assumes a zero VAT rate and no excise tax payments. When importing VAT and excise taxes go to the tax authorities of the Russian Federation.
The second step - to a single space
At the end of 2011, the participating countries created the Eurasian Economic Commission. Among the main tasks of the commission was, among other things, to further strengthen economic ties as a bridgehead, on which the creation of the EAEU was supposed to unfold.
At the beginning of 2012, the Common Economic Space (CES) was established, which strengthened the mutual integration of countries. The beginning of work was marked by documents ratified by all members of the created space in the amount of 17 agreements.
This was the last organizational stage, the result of which was the agreement on the creation of the EAEU, signed on May 29 last year in the business center of Kazakhstan, Astana. On January 1 of this year, the union entered into force with the participation of Russia, Kazakhstan and Belarus, a day later the agreement was ratified by Armenia. And only after four months did the entry of Kyrgyzstan take place.
Armenian share
For a long time, with the accession to the Russian unions at the Asian theater of world geopolitics, Armenia pulled. And although the country entered the newborn association on January 2 of this year, until then it has been drawing out additional preferences for itself for any talk of joining the same Customs Union and earlier organizations. Based on the results of tightening tactics, Armenia knocked out a 1.13% share of the customs duties of goods imported into the territory of the union. It is worth noting that the country has no direct borders with any of the participants in the Customs Union. In addition, Armenia will switch to common customs tariffs for the purchase of goods (mainly agricultural products) only by 2022. Separate tariffs for milk, eggs and honey will be valid until 2020, and for fruits and nuts - until 2019.
Similar exemptions are provided for in other types of food products. Until 2018, they will apply zero customs duties on gasoline, a single tariff with the EAEU will be introduced only in 2020. In the same way it is planned to regulate duties on pharmaceuticals, organic and inorganic products, fertilizers, household chemicals and some others.
The benefits for the new entrant mainly fell on the largest player in the union - Russia, and, according to some economists, this year could cost $ 5.2 billion. It is worth adding that shortly before the official entry of Armenia into the EAEU, the European Union allocated 77.5 million euros.
Arrived at the regiment
Kyrgyzstan was the last participant to date, the EAEU will finally accept a new player on May 29, according to the signed documents. The accession on May 8 of this year was announced by the newly elected President of Kazakhstan, Nursultan Nazarbayev. In his speech, he noted that all doubts that arose earlier were removed.
Moreover, at the same time, the Kazakh leader also announced the intention expressed by the EAEU countries not so long ago to conclude an agreement on a free trade zone with Vietnam. Interest in this agreement was also shown by Turkey, Azerbaijan, India and Mongolia.
Economic development strategy
Although there was a long way to creating the EAEU, what it is from an economic point of view is still not very clear. Several integration positive aspects for national economies were declared at once. In particular, the final cost of goods should be reduced due to significantly reduced costs of transporting goods within countries, as well as selling them abroad. The economic development of the participating countries should be at the same level, which will ensure “healthy” competition. Meanwhile, how countries reached one level was not explained. In addition, it is expected that cost reductions resulting from the abolition of trade restrictions will increase labor productivity and, consequently, increase wages.
The expanding territory of the EAEU and economic growth will lead to an increase in demand, adherents of the union believe, which, in turn, will stimulate and help increase production volumes of all types of goods. And thus, the welfare of the peoples of the union should only grow every year.
Compromise approaches
Despite the declared tasks, the union nevertheless began its existence with lighter-form obligations. So, a much smaller range of powers was left to the Eurasian Economic Commission and the court, which were supposed to monitor and regulate compliance with the agreements. In case of failure to comply with ECE decisions, the dispute passes to the judicial plane. However, the decisions made by the court are advisory in nature, and of course, decisions on controversial issues are taken at the level of the council of state leaders. Moreover, until 2025, and even for an indefinite period, decisions were postponed on the creation of the EAEU financial regulator, as well as a single body for managing energy trade.
Supervisory authorities
Within the framework of the EAEU, following the example of the European Union, the relevant management bodies have been created: the Supreme Eurasian Economic Council and the Eurasian Economic Commission. The first governing body includes the leaders of the participating countries and the chairmen of the governments of these states. Leaders in the framework of the union meet annually at least once, and heads of government usually meet twice a year. Decisions are made on a democratic basis, they are binding on all members of the union. The VEES powers also include determining the composition and competence of other bodies of the union.
ECE is a permanent body of the union. Its powers are defined in the EAEU Statute and mean providing conditions for the successful integration of countries into common economic realities. Also, ECE was transferred to the competence of the previously existing CU Commission. Among them are the definition of macroeconomic, energy, currency, migration policy; resolving issues of tariff regulation and natural monopolies, subsidies and foreign trade, and many others. The ECE budget is formed by contributions from members of the union.
Reaction of the West
The organization of a strong Eastern alliance, of course, does not smile at all in Western countries. Both the European powers and the United States express their fears and disagreement with any attempts at integration in the post-Soviet space, and even more so in the previous composition. The question “The EAEU - what is it, first of all, from a political point of view” was initially asked by almost all antagonistic political scientists.
The most categorical discontent sounded on the part of the United States, which, after the creation of the Customs Union and in anticipation of agreements on the EAEU, unequivocally designated this as Russia's attempt to occupy a dominant position in the post-Soviet space. Meanwhile, according to the American political scientist Zbigniew Brzezinski, Russia can become a powerful power and form an eastern policy only if it unites with Ukraine.
Prospects for the single currency
The Eurasian Union was created relatively recently, but the most pressing issues remain the currency and financial integration, which involves, in particular, the creation of a single currency, which will strengthen the single market between all participating countries. Already in March this year, Vladimir Putin instructed the Central Bank and the lower house of parliament to find a solution to these issues together with the central banks of all countries participating in the union by September 1 of this year.
Among the names of the new monetary unit, “Altyn” (a term of Turkic origin dating back to the time of the Golden Horde) and “Evraz”, which intersects with the Euro, are discussed. Experts, commenting on the idea of a single currency, note that full integration without it is impossible. Earlier, the idea was also expressed of creating a single Eurasian Central Bank, following the example of the Central European Bank for Kazakhstan, Russia and Belarus. In the documents signed on this issue, the year 2025 was listed. At the same time, the deteriorating geopolitical situation is probably pushing, in particular, Vladimir Putin to accelerate measures, analysts say.
Political ambition
As soon as it came to currency integration within the framework of the EAEU, international experts began to more clearly assess the union from the point of view of exclusively the political plane. Experts say that accelerating this process with complete distrust of any of the currencies of the participating countries is an extremely risky operation, and the prospects for the EAEU raise big questions in this context. Understanding this, of course, will convince partners to meet Moscow, but also allow themselves to bargain a lot of concessions. All countries, analysts say, are ready to work together only if they can get something in return. These preferences will be covered at the expense of the Russian budget. And since the extreme interest in the union is obvious from the Russian side, it may have the weakest position.