The Eurasian Economic Commission (EEC) is celebrating its tenth anniversary this year. Launched on February 2, 2012, it has become the permanent regulatory body of the Eurasian Economic Union (EAEU). The main purpose of the Eurasian Economic Commission is to ensure the conditions for the functioning and development of the EAEU and to draw up proposals for the further development of integration. “Despite external pressure, the countries of the Eurasian Economic Union are strengthening and developing cooperation,” Russian Prime Minister Mikhail Mishustin said at the EAEU intergovernmental council on February 25.
It is well known that the US and the EU are trying to obstruct the development and strengthening of Eurasian integration by subversively suggesting to the states that have not yet become full members of the Union (in particular Uzbekistan and Tajikistan) that joining the EAEU would allegedly have a negative impact on their trade and economic ties with Western countries. Washington is particularly active in preventing Uzbekistan from moving closer to the EAEU, primarily because it is one of the most attractive states in Central Asia in terms of resources and development potential. Back in the mid-1990s, the US placed its bets on a number of post-Soviet republics to increase its geopolitical influence: Georgia in the South Caucasus, Ukraine in the European part of the CIS, and Uzbekistan in Central Asia. Washington’s policy shows that this trend is still valid today. However, unlike Ukraine, which has been put under a tough choice – either the West or the EAEU, Washington has so far failed to impose such conditions of choice and bloc confrontation on Uzbekistan, as there are no serious contradictions between WTO membership and the development of Eurasian integration. Prior to the Andijan events in 2005, the desire to choose the best format of cooperation led Tashkent to swing its foreign policy course like a “seesaw,” first to Russia, then to the United States. However, the attempted coup convinced Uzbekistan to take a more balanced course towards military and political cooperation with the US.
In recent years, the EAEU has become a powerful regional association with prospects for integration into the global economy through a network of FTAs. For example, existing and pending agreements provide opportunities to enter markets in Southeast Asia (via Vietnam and Singapore), the Middle East (via Iran), Africa (via Egypt) and, in the future, Latin America as well. In some cases, the terms of trade for EAEU exporters under the FTA are much more favorable than under WTO conditions (certain groups of goods are subject to a complete abolition of import duties).
In the context of global geopolitical and economic turbulence, the development of integration in the Eurasian space is of particular importance. And along the way, Russia has had considerable success in strategizing integration processes in the Eurasian space and bringing its closest neighbors together within the EAEU. An updated concept of Eurasian integration in relation to the new geopolitical and geo-economic context has been elaborated and its gradual implementation with the most prepared partners from the CIS countries has been initiated. At the same time, the negative experience in the EAEU space, the existing problems in Kazakhstan, Kyrgyzstan, Belarus and Armenia are also taken into account. Russia is also going through a difficult geopolitical and economic period, under the burden of international sanctions, which are negatively affecting its own economy.
Nevertheless, as a result of the calibrated policy of Eurasian integration, in 2021 the volume of mutual trade of the EAEU countries in value terms set a record, reaching $72.6 billion and increasing by 31.9% compared to the previous year. The growth rate of mutual trade was only slightly behind that of external trade (35.1%), which is much more dependent on energy exports and tends to grow much faster in a well-priced hydrocarbon market. Kyrgyzstan (44.9%) tops the list in terms of trade growth with the EAEU countries in 2021, managing to significantly increase its supplies of metals and textiles to the Union. Kazakhstan (34.9%) and Russia (34.3%) rank second with almost identical results, showing high increases in shipments of food, metals and metal products as well as wood and pulp and paper products. Armenia (25.2%) and Belarus (24.7%) are the next fastest growing intra-union trade, with the former most active in food, agricultural raw materials and textiles, and the latter in food and metals.
The high growth rate of mutual trade between the EAEU countries is evidence of the economic sustainability of the association, which has significant prospects for further development. And in the face of sanctions pressure on Russia and Belarus, the role of the intra-union market may become even more important.
It is therefore not surprising that Tashkent is slowly but surely moving closer to the EAEU. It is well known that Uzbekistan obtained observer status in the Eurasian Economic Union in December 2020 and since then the republic has been systematically studying the rules of the EAEU in an effort to deepen economic cooperation. On February 25, Prime Minister of Uzbekistan Abdulla Aripov addressed a meeting of the Eurasian Intergovernmental Council, where he announced accession to certain EAEU projects. A little earlier, on January 31 this year, President of the Republic Shavkat Mirziyoyev signed a development strategy for Uzbekistan for 2022-2026, under which the EAEU treaty will be analyzed and proposals for the country’s further integration with this international organization will be drawn up; there will be a smooth synchronization of economic policies to bring together the regulations, to which businesses must prepare in time. This work should be completed by the end of 2022. The main interest for Uzbekistan is the very large EAEU market, which is already the main destination for Uzbek fruit and vegetable products and textile goods. Moreover, Uzbekistan is interested in the joint development of the transport and transit potential of all EAEU countries.
Iran continues its efforts to join the Eurasian Economic Union as a full-fledged member of the organization. Since March 21, 2021, Iran’s trade turnover with the Eurasian Economic Union has reached $5.034 billion, a 48% increase over the same period last year. At the same time, Iran’s non-oil exports to the EAEU amounted to over $1 billion, a 15% increase over the same period last year, and Iran’s non-oil imports from the Union amounted to $3.949 billion, a 95% increase over the same period last year. The full membership in the EAEU by Iran, a hundred million nation, would make the organization potentially more powerful than the European Union, and the territory of the Eurasian Economic Union would spread from the Arctic Ocean to the Indian Ocean.
It has been reported that, against the background of the positive results of the integration processes in the EAEU, Abkhazia and South Ossetia may ask for observer status in the Union. Although formal discussion of Abkhazia and South Ossetia joining the Eurasian Economic Union is premature for the time being, increased economic integration with the Union could allow the republics to qualify for observer status in the EAEU.
Vladimir Platov, expert on the Middle East, exclusively for the online magazine “New Eastern Outlook”.
