In 2012, Russia is expected to officially join the WTO, and this historical event will create new dynamics for the Eurasian Economic Community, an international organization made up of Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan as official member countries, and Ukraine, Moldova, Armenia as observer countries. While the concept of an Eurasian economic community has its origins in the immediate post-Soviet Union period, EurAsEC was formally established in 2000. Economic growth of 5.9% compares very favorably with other developing regions. EurAsEC has also enhanced its position through the development of a Common Economic Space, including a Customs Union which supports community wide trade within a common set of tariffs.
In the years following the collapse of the Soviet Union, Kazakhstan proposed the creation of a Eurasian Union of States. This idea was formalized in the “Treaty on the Establishment of the Eurasian Economic Community of 10 October, 2000.” Since approval of the treaty, the member states regularly organize meetings and summits to discuss, propose, and set direction for important sectors, such as transportation, energy, customs, agriculture, and develop key policies that serve to build the infrastructure for creating an integrated region (Table 1).
|October 2000||Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan sign the EurAsEC treaty|
|May 2001||Effective launch of the EurAsEC|
|January 2002||Council on Transport policy created|
|February 2003||Approval of EurAsEC energy policy|
|June 2004||World Customs Organization MOU signed|
|March 2005||Agro-Industrial Policy created|
|August 2006||Establish framework for Customs Union with Belarus, Kazakhstan, Russia within EurAsEC|
|October 2007||Approval of plan of action for Customs Union|
|September 2008||Eurasian Business Council Established|
|January 2010||Customs Union of Belarus, Kazakhstan, Russia begins to function|
|March 2012||EurAsEC Summit in Moscow|
Source: Eurasian Economic Community Integration Committee Secretariat (2011), various public press releases
If the five member countries and three observer countries are included, EurAsEC is a region that has a population of approximately 233 million persons, and a nominal GDP of approximately US $2.3 trillion. The average growth rate is estimated at 5.9%, a high rate of economic growth that will further enhance the economic prospects of individuals and businesses in this region (Table 2).
|No.||EurAsEC Status||Country||WTO Member||Population (Mn)||Nominal GDP (USD Bn)||Per Capita GDP (USD)||GDP Growth Rate (%)|
Note: Russia’s WTO accession is scheduled for review by the Russian Parliament in 2012. Source: IHS Global Insight
The EurAsEC has an institutional framework that supports executive orders, facilitates debate about new legislation and regulations, and a court system where legal issues and disputes can be settled between the EurAsEC members.
Interstate Council: The Interstate Council is made up of the national heads of state and the heads of government for each member country. The Chairmanship of the Council is held on a rotational basis for a period of one year. The Council defines overall strategy, sets directions for the Community, including agro-industrial policy, transportation, energy, food safety, labor, and international EurAsEC activities.
Interparliamentary Assembly (IPA): This is the organization within EurAsEC that serves to coordinate legislative activities, coordinate EurAsEC legal policy, and create legal conditions for harmonizing legal codes of the member countries. Each member country appoints delegates to the IPA, and the headcount for each country is proportional to the size of the country in the community: Belaruas - 16 parliamentarians; Kazakhstan - 16 parliamentarians; Kyrgyzstan - 8 parliamentarians; Russia - 42 parliamentarians; Tajikistan - 8 parliamentarians.
Community Court of Justice: This organization is responsible for dispute resolution of issues of economic importance that arise between the member countries and may have relationship to the implementation of laws or treaties adopted by the EurAsEC. In addition to the above key institutions, there are related organizations that support these institutions such as the EurAsEC Secretary General, the EurAsEC Integration Committee and affiliated councils.
As a first step in creating the CES, Belarus, Kazakhstan, and Russia announced the creation of a Customs Union on January 1, 2010. All customs borders between the three countries would be removed on July 1, 2011. The WTO Working Party on Russia’s Accession also recognizes the creation of this Customs Union, and that Russia will allow for a reasonable period of time for WTO members to review legislative changes that have an impact on the Customs Union. The significance of this is that in the future there will be a common customs territory, WTO members are accorded with MFN (Most Favored Nation) status, and there will be application of unified customs tariff to help facilitate the free flow of goods.
Belarus, Kazakhstan, and Russia are the three countries in EurAsEC that form the CES. Public announcements declared that the CES would be effective from January 1, 2012. The major aims of the CES are: (1) harmonize legal codes, (2) create a common support infrastructure of taxation, monetary, currency, finance, trade and customs policies, and (3) create the necessary frameworks for the free movement of goods, services, capital, and labor.
EurAsEC is a unique international community, and it is expected to continue to evolve over time. In fact, at the EurAsEC Interstate Council meeting held in Moscow in March 19, 2012, Russia’s President Dmitry Medvedev declared that a comprehensive agreement on Eurasian Economic Union would be created by January 1, 2015. Until then, there is the need to coordinate the integration of regional projects, extend the economic and trade agreements to all members in the organization, and implement the EurAsEC trade framework that aligns with WTO rules. Once the EurAsEC members achieve WTO membership status, they will be able to impact important policy and strategy decisions in the global trading system.