_ Yuri Kofner, head, Eurasian sector, Centre for Comprehensive European and International Studies (CCEIS), National Research University “Higher School of Economics”; research assistant, IIASA. Munich, 31July 2018.
On 27 July 2018, a meeting of the Intergovernmental Council of the Eurasian Economic Union (EAEU) took place in St. Petersburg, in which the heads of governments of the member states, as well as the chairman of the Board of the Eurasian Economic Commission (EEC) Tigran Sargsyan, took part. The agenda of the event included issues of the development of the digital economy, improvement of the regulatory and legal framework of the Union, as well as cooperation in the energy and industrial sectors.
Particular attention was drawn to the format of Armenia’s participation in the summit, since after the transfer of the powers of the head of state to the prime minister, a legal conflict occured. On the one hand, the premier replaced the president in the Supreme Eurasian Economic Council, where decisions are made by the heads of state. At the same time, the norms of the EAEU imply that the Prime Minister is represented in the Intergovernmental Council of the Union. Therefore, Armenia at the moment has become the only country that is represented in two key structures of the Eurasian Economic Union by one person – Nikol Pashinyan. According to him, when the legal basis for the functioning of the Intergovernmental Council will be brought into line with the new Constitution of Armenia, the republic will be represented in it by the first vice-premier.
Traditionally, the Intergovernmental Council has become a platform for discussing the dynamics and structure of trade and of the economic cooperation between the member states.
“In the first quarter of 2018, both the internal trade turnover of the countries of the Union and the volume of foreign trade continued to grow (by 16.4% and almost 24%, respectively). Moreover, the participating states have increased their exports to the common market of the Union not only of raw materials, but also of machinery, equipment, metals, metal products, chemical products, food and agricultural products”, said the Russian Prime Minister Dmitry Medvedev.
The prime ministers discussed the implementation of the digital agenda of the EAEU. To match the scale of the global digital transformation, the member states and the Union as a whole need to strengthen project activities at the integration level, conduct experiments, give life to joint digital research.
The Eurasian Economic Commission is working on more than 25 initiatives, proposed both by the public and private sectors. Three of them, on the basis of analysis and discussions with experts, went into the research phase. Thus, in the near future it is planned to develop a concept for the ecosystem of Eurasian digital transport corridors and a model for regulating cross-border data turnover in the Union. In addition, the parties agreed to work out approaches to the development of digital trade in the Union and to the formation of regulatory “sandboxes”.
At the same time, the work on eliminating trade barriers still remains relevant. To solve this problem, a special expert group will be created, which will include representatives of the business communities of the EAEU countries. In the area of trade, Medvedev also announced the creation of a traceability system that will cover the full cycle of goods moving in Russia – from customs to retail. “I propose to extend this mechanism as soon as possible to the entire Union”, the Prime Minister of the Russian Federation said. So far, Kazakhstan and Russia have agreed to launch a pilot project to monitor road transit traffic using navigation seals and a project to label tobacco and tobacco products, the chairman of the EEC Tigran Sarksyan said.
The Intergovernmental Council also instructed the EEC to conduct a pilot project to assess the actual impact of the Commission’s decisions. The EEC will approve the action plan for its implementation before October this year.
Another notable subject for discussion were the changes that are planned to be made to the EAEU Treaty. According to the Prime Minister of Kazakhstan Bakytzhan Sagintayev, “work is under way to introduce about 70 amendments to the EAEU Treaty in order to improve the law of the Union”. The Belarusian representative as a whole positively assessed the changes being prepared, but proposed to specify the algorithm for applying the norm on the introduction of “national exemptions on government procurement”.
“In our opinion, such exemptions should be introduced in exceptional cases and for a limited period of time only – no more than two years. We believe that it should be impossible to allow a measure that is regarded as exceptional and an anti-crisis instrument to be prolonged an unlimited number of times”, the Prime Minister of Belarus Andrei Kobyakov emphasized.
The Eurasian Intergovernmental Council approved the decree “On the formation of a high-level working group on the issues of integration cooperation on import substitution in priority industries”. The working group will be created to develop common approaches to the implementation of import-substituting projects in the Eurasian Economic Union.
Consideration of issues of import substitution and industrial cooperation is connected with decisions in the sphere of customs, tariff and non-tariff regulation, removal of obstacles to exports of industrial products to the common market of the Union, attracting investments and increasing the availability of financial resources. These issues affect the competence of not only the industrial, but also economic and financial blocks of the parties and suggest the adoption of operational decisions at the highest level. In this regard, the working group will include representatives of the EAEU states at the level of deputy heads of authorized bodies.
In addition, the draft decision of the Supreme Eurasian Economic Council “On the formation of a common gas market of the Eurasian Economic Union” was considered, which this year should be submitted for consideration by the Supreme Eurasian Economic Council. It is planned that the heads of state will approve the program for the formation of the common gas market of the Eurasian Economic Union and the plan of measures to form this common market.
During the summit, the issue of developing new approaches to the transfer and distribution of import customs duties between the EAEU member countries was also raised. The Prime Minister of Kyrgyzstan Muhammadkaliy Abylgaziev suggested introducing the following tools for the calculation of customs deductions:
- An additional “development ratio” for countries with low GDP in order to ensure their budget sustainability;
- “A premium for domestic trade” for the EAEU member states, based on the relation of a country’s internal trade within the Union and external trade with third countries outside.
In addition, Bishkek proposes, when distributing duty incomes, to take into account the number of trade exemptions, tariff preferences and “mirror statistics of imports of goods from non-CIS countries”.
The next meeting of the Intergovernmental Council of the EAEU will be hosted by Belarus in October this year. In accordance with the annual rotation Russia in 2018 holds the presidency in the institutes of the Eurasian Economic Union.
Eurasian soft power: After the official part of the Eurasian Intergovermental Council the prime ministers of the EAEU member states and EEC chairman enjoyed a boat ride on the Neva river.