Eurasia and the emerging Western clash

ALBAWABA - After the end of the Second World War, countries pursued the conclusion of bilateral and regional agreements, because of the need for economic reconstruction and trade arrangements.  The Treaty of the Eurasian Economic Union (EAEU) was signed in May 2014 by Belarus, Kazakhstan, and Russia, then the United States and  Kyrgyzstan also became its members.

The Union began its work on Jan. 1, 2015, and has a population of more than 184 million people. Union member countries are located in the Eurasia region, Eastern Europe, Central Asia, and the Caucasus.

The creation of the EAEU led to the ‘four freedoms’ of freedom of movement of goods, services, capital, and labor between member states. Unlike the European Union, the EAEU has no transnational political structure and pursues economic rather than political goals. 

In the past years, EAEU has tried to facilitate trade, sustainable economic development, a single market for goods, services, labor, capital, modernization, competitiveness, and economic cooperation. 

Also, the gradual removal of customs laws, the establishment of a common foreign tariff, and customs harmonization have also been on the agenda.  In fact, the member states, compared to other regions of the world, managed to overcome the severe drop in economic activity and the pandemic and develop coordinated measures. They grew the GDP according to the guidelines until 2025.

In the meantime, the supporters of the EAEU say that the union has gained a better position in the international economy, and has kept its economic conditions stable in the global market and the political environment in world. or the EAEU has also made progress in some indicators and has shown maximum stability and efficiency.

The EAEU has a global position in world oil and gas extraction, energy production, railway, and steel production, and has a real gross domestic product of about 2.1 trillion dollars.  Although, in 2022 there were trade problems due to the Russian embargo, EAEU trade increased by about 30%.  Also, the bilateral trade between member countries in national currencies increased.

Trade with foreign actors

One of the most international activities of the Eurasian Economic Union is the conclusion of international agreements. Therefore, progress has been made in the creation and development of the free trade zone with several countries.

In this regard, at the meeting of the Supreme Eurasian Economic Council in Bishkek, (December 2020), instructions such as intensifying cooperation with neighbors, CIS, developing dialogue with Shanghai Cooperation Organization (SCO), (ASEAN), European Union (EU), BRICS and other countries in Central Asia and the Middle East were considered for activities for 2023.

In fact, cooperation with regional structures such as ASEAN will contribute to economic cooperation beyond the horizon of 2025 and the Eurasian Economic Union on the world stage. Also, the expansion of business contracts with foreign partners such as the observing countries of the EAEU (Moldova, Cuba, and Uzbekistan), China, Vietnam, and Serbia will be facilitated.  In addition, they are pursuing access to a trade agreement with Iran and the UAE, Indonesia, Azerbaijan, Tajikistan, Bosnia and Herzegovina, Egypt, Israel, Bangladesh, Cambodia, Mongolia, South Korea, and Ecuador.

China is the EAEU's largest partner, and the EAEU's trading with China has increased by almost 30% during 2022. In addition, trade turnover between EAEU member states and India is very low, but if the union succeeds in concluding free trade with New Delhi, it can increase its role in the process of expansion.

Promotion of short-term and macro-plans

The EAEU has suffered from a lack of coordination in the past. However, although the strategic approach to the development of Eurasian economic integration until 2025 was relatively successful, the success of the integration project and the status of the EAEU also depend on the actions of the members.

Also, for the EAEU, which has a wide task to shape the future economy, preparing a new document for the integration and economic integration in the future can be a practical guide to a large extent.

Priorities for 2023 include strengthening technological governance, digitization, investment, and expansion of youth cooperation are useful for the union. 

But the interaction of countries in the future depends on areas such as expanding the use of national currency and put an end to the dependence on the dollar, removing obstacles in the internal market, and creating transport corridors and new export and import channels.

Perhaps the EAEU is a successful integration, but as an example of the cooperation of all members in future agreements to create common markets for energy resources, the formation of a common Eurasian energy market, can be a measure of convergence within the union and the formation of a positive image. 

Sanctions and challenges facing the EAEU

There are challenges in the EAEU such as the type of convergence, the type of Russian hegemony, limited financial resources, structural weakness, slow decision-making process, lack of symmetrical structure of the members, etc. However, the economic impact of the union on the Russian economy is Low, and Russia's trade with the EAEU is lower than with the rest of the world. According to some critics, the Kremlin's mentality in forming the EAEU is based on geopolitical considerations, not economic ones. That means, EAEU does not provide enough economic benefits for some other actors within the union and make these countries more dependent on Russia.

This is while the main task of the EAEU is to align the interests of the member states with the interests of the Union and vice versa. Even though many structures have been copied from the EU structures, the EAEU differs from the EU in some key aspects. In addition, within the framework of the EAEU, there is practically no horizontal connection between countries, and it is mostly Russia-centric.

On the other hand, although the recent international sanctions against Russia have practically made the EAEU much more for Russia than before, the rest of the members are afraid of being subject to US and European Union sanctions.

In fact, sanctions have a negative impact on the economy of the countries under sanctions and their trading partners. the possibility of stopping the sanctions is unlikely, and to deal with them, it is important to agree on common measures.

Also, the interests of each of the countries of the EAEU are special, and the long continuation of the embargo can affect competitiveness, economic development, etc. have a negative impact.

On the other hand, the Ukraine crisis is finally a determining factor in the future of the EAEU. The way of solving this problem and the structure will affect the future direction of the union.

In the situation of decreasing relations with the West, it is very good for Russia to develop the Eurasian direction of foreign policy. Even some foreign actors will abandon cooperation with the EAEU with the threat of longer, more and wider anti-Russian sanctions.

The future geopolitics of the Eurasian Economic Union 

The existence of huge resources and large energy and trade corridors and the neighborhood of great economic powers and the competition of world powers introduce Eurasia as a strategic region.

In the meantime, despite the EAEU's respect for the independence and territorial integrity and coordinates of the political structure of the member states, common interests, equality, market economy, and the integrity of the Eurasian economic space, the role of Russia is very prominent.

The strategic goal of the EAEU is to deepen regional integration and create a new architecture of international economic relations based on it. Therefore, Moscow will try to connect EAEU, SCO, ASEAN, and BRICS and use it for its national interests.

In the meantime, the integration of the EAEU will be determined somehow by the results of Russia's confrontation with the West and NATO. The West's geopolitical projects for the Eurasian region, keeping countries away from Russia and China, are not compatible with expanding the competencies of the EAEU and deepening integration with Russia.
 
Since the macroeconomic indicators in the Russian economy affect the economy of all the countries of the  EAEU, The possibility of reducing or expanding Russia's political and military influence strongly affects the future position of the Union.

In fact, the desire for Russia is still high in the region of Central Asia and the Caucasus. But Central Asian leaders may be willing to forge closer ties with other actors. Or economic cooperation with Russia will lose its attractiveness and others such as China and Turkey will become alternative partners.

However, it has become more difficult to talk about the future of the Eurasian Union. For the West, the presence of the EAEU is a bad reality. Opponents also believe that the organizations centered on Russia will lose their appeal and even disappear completely. The E EAEU may not reach its ambitious goals by 2025, but the union will endure.

In fact, the structural changes in the world economy, the shift of the global center of economic activity to Asia and the Asia-Pacific region, and the increase in foreign trade turnover with this region are somehow in favor of the EAEU.  Also, any future success of the EAEU in increasing trade agreements, fully absorbing the observer and cooperation with the Shanghai Cooperation Organization (SCO), (ASEAN), and BRICS, will consolidate the position of the EAEU on the world stage.