The EAEU moved to the stage of painstaking work to create a single market without exemptions

_ Yuri Kofner, head, Eurasian sector, Centre for Comprehensive European and International Studies, analytic, OECD-HSE Research Centre, Higher School of Economics. Interviewed by Anna Fedko for “The Diplomat’s Notes”. Moscow, 29 May 2018.

On May 29, 2018, the Day of Eurasian Integration, the Higher School of Economics hosted the international research conference “Theory of Eurasian Integration” dedicated to this significant day. The event was organized by the OECD-HSE Center with the support of the analytical media “Eurasian Studies”. Yuri Kofner shared his opinion on Eurasian integration with us.

– Tell us about your scientific work as part of the OECD-HSE Centre and the Centre for Comprehensive European and International Studies (CCEIS). Can they be called “think tanks”?

– Yes, without doubt. For example, CCEIS and their researchers, such as Timofei Bordachev, Dmitry Suslov, and the Dean of the Faculty of World Economy and World Politics Sergei Karaganov and many others are members of the Valdai Club, as well as of the Council for Foreign and Defense Policy of the Russian Federation (CFDP), who are among the most influential policy institutes in Russia and the Eurasian space. It is precisely they who form, in many respects, the agenda for the conjunction of the EAEU with the Silk Road Economic Belt. This idea, as well as the very concept of a “Greater Eurasian Partnership” were the first developed by the CCEIS and Dr. Karaganov. The OECD-HSE Center works with the Government of Russia and we are currently conducting a study for the Russian government about Russia’s Chairmanship in the Eurasian Economic Union in 2018. They are both scientific centres and educational ones, so, of course, the answer is “yes.”

– You are also the editor-in-chief of the analytical portal “Eurasian Studies”. How can you, in general, describe the direction of your activities there?

– In fact, the analytical media has two sites: one in Russian and the other in English. The main goal of both sites is to accumulate analytical materials on Eurasian integration. We publish all the reports and working papers that are written on the Eurasian subject in both Russian and English. We collect all analytical materials on Eurasian integration and, of course, more than half of the materials are our own new articles, written by students, graduate students, researchers, as well as staff of Eurasian Economic Commission (EEC) and of the Eurasian Development Bank (EDB). This is a portal for people who are, in one way or another, interested in issues of Eurasian integration. According to our statistics, we have a huge number of requests from anti-plagiarism sites. This suggests that many students use our portal to write term papers, theses and other academic research.

At the same time, it is worth noting one big problem: on the one hand, in the West very little is known about the Eurasian Economic Union. Only a few Western experts write about the EAEU. Unfortunatelly  most of them are very biased. There is practically no objective information. On the other hand, in the East, for example in China and India, many researchers and businessmen learn about the Eurasian Union not from Russian-language sources, but from English-language ones, so again the information is biased and the attitude towards the Eurasian Union will be appropriate. Our aim is to overcome this problem. “Eurasian Studies” is now the only site where objective information about the Eurasian Economic Union is published in English. The main goal is to convey the truth about Eurasian integration.

– How do you see the development of the EAEU in the period from 2018 to 2025?

– I think that now our main task is consolidation, the solution of all the pressing problems that exist in terms of deeper integration. From 2010 to 2014, we had a period of extensive growth, when we removed customs borders between the member states and this entailed a multiple increase in the mutual trade turnover. At that time the benefits from the Eurasian Union were clear to see for everyone.

Now its benefits are not so obvious, because we have moved to the stage of painstaking work, when a single labor market is being created, a single energy market, a single market for services, etc. The most important task now is to carefully and step-by-step remove various barriers to mutual trade. This especially concerns issues of technical regulation, entrepreneurs’ access to each other’s market, a common interpretation of supranational Eurasian law.

And further, as it seems to me, closer to 2025, we should concentrate on the most promising directions for integration: the digital economy and the creation of Eurasian industrial corporations. Already, under the chairmanship of Russia, we will actively promote cooperation in the education sphere (for example, student exchanges) and the creation of a unified scientific and humanitarian space.

– Is it advisable for the Eurasian Economic Union to establish tariff barriers with China, the European Union and the US in oder to protect its own domestic producers within the common EAEU market?

– This is a very interesting and correct question. For example, now the EAEU has signed an agreement with China on non-preferential trade and economic cooperation. As part of this agreement we agreed to cooperate in various areas: customs procedures are simplified, as are the conditions for mutual investment, logistics issues are regulated. At the same time, the removal of tariff restrictions was not included in this agreement. This, of course,  is the necessary central piece for any free trade area. This exemption was made for clear and definite reason. We are afraid that cheaper Chinese goods will flood our market. At the same time, for example, there are no such limitations in the EAEU’s interim FTA agreement with Iran. Yet again, there are significant exceptions to the commodity nomenclature for competing commodity groups, for example, for petroleum products.

In the future, if we move on to negotiating a common economic space between the Eurasian Union and the European Union, there will also be the question: what kind of cooperation do we want? A free trade area would certainly be beneficial to European exporters, because they want to sell more of their products in our market. We, however, would prefer an agreement similar as to the one that we have with China. I.e. one that will be aimed at increasing foreign direct investments and facilitate technology transfer from Europe. Logically, here we would need a compromise: What do we want? What do they want? And where are our interests similar?

A compromise solution, I personally believe, in all cases could be an asymmetric free trade area. This means that our partner, who would be more competitive in those or other commodity positions, whether it would be China, the EU or the US, reduces its tariff restrictions for our goods with higher added value on day one of the agreement. Then we reduce our tariff restrictions after the expiration of a certain transition period. Three years, five years, ten years… This will, on the one hand, help to protect of our producers, and on the other hand, it will be an undeniable incentive for us to become more competitive.

But that is not all. We have to supplement this multilateral agreement with bilateral agreements in those areas where the Eurasian Economic Commission does not yet have the necessary competencies. For example, in the field of intellectual property, trade in services, etc. It is important that these issues should then be negotiated 50/50 on a supranational and national level, for example, along the lines EU-Russia, EU-Kazakhstan, EU-Armenia, EU – Belarus, etc. A multi-layer format is possible, where there is one large agreement, for example, on an asymmetric FTA, and also additional agreements on more specific issues. For us, the most important thing, of course, is to attract investments and new technologies.

– Do you know about the Model EAEU, held annualy at the HSE, where students model the work of this international organization? In your opinion, is this a good project?

– This is a very good project. Through games one can learn the mechanism and  decision-making proccess of the Eurasian institutions. We learn, for example, that the Eurasian Union, in comparison with the European Union, is a more democratic union, because all decisions are made in consensus. Moreover, each country has the same voice regardless of the size of its economy or population. In general, little is known about the Eurasian Union, about the processes of Eurasian integration both inside our Union, beyond its borders and especially among the youth. The Model EAEU is the kind of project where yong people reproduce the work of its institutions and it helps to understand how they work. I would like, as with the Model UN, the Model EAEU to be held in more universities. Not only in our country, but also in the territory of the former Soviet Union and in the further abroad.

– How do you generally evaluate student activities and initiatives in the Higher School of Economics in the field of popularization of knowledge about the Eurasian Economic Union? Many do not know about it, are not interested, and we need to instill interest in such organizations.

– I would not say that no one is interested. On the contrary many are interested, just the question is really how do we match this interest. The HSE, to my great content, does a lot to meet this interest. The Model EAEU, as well as our special lectures course on Eurasian integration can be cited as good examples. We are now developing a separate website for all the Eurasian projects of the Higher School of Economics. We actively cooperate on educational projects, on various other projects with the Eurasian Economic Commission, as well as with the Eurasian Development Bank. We very much welcome any cooperation with other universities. We would be very happy to cooperate in all areas and I would like this student’s interest to rise to a new systematic level that could later lead to some career opportunities in the institutions of the Eurasian Union – the Eurasian Commission, the Eurasian Bank and other organizations.

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