The Eurasian Economic Union: Basic Facts

_ George Kaufmann, analyst, European Society for Eurasian Studies (ESEC). Munich, 14 October 2018.

The Eurasian Economic Union (EAEU) is an economic union of states located in central and northern Eurasia.

The Treaty aiming for the establishment of the EAEU was signed on 29 May 2014 by the leaders of Belarus, Kazakhstan and Russia, and came into force on 1 January 2015. Treaties aiming for Armenia’s and Kyrgyzstan’s accession to the Eurasian Economic Union were signed on 9 October and 23 December 2014, respectively. Armenia’s accession treaty came into force on 2 January 2015. Kyrgyzstan’s accession treaty came into effect on 6 August 2015. It participated in the EAEU from the day of its establishment as an acceding state. Moldova was granted Observer Status in April 2017.

In 1994, the President of Kazakhstan, Nursultan Nazarbayev, first suggested the idea of creating a “Eurasian Union” during a speech at Moscow State University. Numerous treaties were subsequently signed to establish the trading bloc gradually. Many politicians, philosophers and political scientists have since called for further integration towards a monetary, political, military and cultural union. However the member states decided to seek a purely economic union, having concerns about keeping their independence and sovereignty intact.

The Eurasian Economic Union has an integrated single market of 183 million people and a gross domestic product of over 4 trillion U.S. dollars (PPP). The EAEU introduces the free movement of goods, capital, services and people and provides for common policies in macroeconomic sphere, transport, industry and agriculture, energy, foreign trade and investment, customs, technical regulation, competition and antitrust regulation. Provisions for a single currency and greater integration are envisioned in future.

The union operates through supranational and intergovernmental institutions. The Supreme Eurasian Economic Council is the “Supreme Body” of the Union, consisting of the Heads of the Member States. The second level of intergovernmental institutions is represented by the Eurasian Intergovernmental Council (consisting of the Prime Ministers of member states). The day-to-day work of the EAEU is done through the Eurasian Economic Commission (the executive body), which is a supranational body similar to European Commission. There is also a judicial body – the Court of the EAEU, as well as two development institutes  – the Eurasian Development Bank and the Eurasian Fund for Stablilization and Development.

The Eurasian Economic Union has its own practice of presidency in the Union, where one of the member states chairs the organs of the EAEU.  Each year, the chairman of the union elects a Member State to head the Union. Currently, Russia presides the Union until December 31, 2018. In 2019 Armenia will chair the EAEU presidency.

Tajikistan was formally invited to join the union and has expressed its interest in acceding. It is recognized as a potential candidate and membership negotiations are underway. At the moment both sides are studying the potential negative and positive effects of Tajikistan acceding to the Union, especially based on the experience of neighbouring Kyrgyzstan. Uzbekistan remains hesitant to join the Economic Union, with Uzbek officials making opposing claims on the prospect of integration. The country prefers not to pursue economic and political integration as of now. Russian officials have stated that integration with the country would be slow and analysts state that as Russian influence and trade increases in Kyrgyzstan and Tajikistan it may persuade Uzbekistan to join in the future. Uzbekistan joined the CIS Free Trade Area in 2014, meaning it has free trade with EAEU member states.

The Eurasian Economic Union has significant potential over the next two decades, with experts predicting a 25 percent growth in the member states’ GDP by 2030, which equates to over US$600 billion. The agreement will give member state citizens access to employment and education across the union. It will also entail collaborative policies in many sectors, including agriculture, energy, technology and transportation. These collaborative policies are particularly interesting for countries in Asia seeking access to energy, trade routes in Central Asia and Siberia, and agricultural goods.

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