Economic potential and political reality – The Eurasian Economic Union

On May 29, the German Embassy in Moscow hosted a panel discussion on the cooperation between the Eurasian Economic Union and the European Union.

Prior to the panel, Dr. Ricardo Giucci presented the results of a Berlin Economics‘ analysis studying the Eurasian Economic Union from a trade policy perspective.

Mr. Giucci first introduced his presentation by specifying three key features of the EAEU: The economic dominance of Russia within the union, the high level of protection vis-a-vis third countries, and the still incomplete internal market.

The analysis shows that, in its current shape, the union does not benefit all of its member states. As of now, the member states Kazakhstan, Armenia and Kyrgyzstan even experience a net negative impact of their membership, which can be attributed to the high level of outward protection and the still existing deficiencies on the common internal market.

However, the EAEU remains an interesting and important trading partner for the EU. Concluding, Mr. Giucci recommended that the EU focus on trade facilitation, rather than trade liberalisation with the EAEU, partly because some of the EAEU member states do not show interest in trade liberalisation with the EU. Trade facilitation on the other hand covers certificates, standards, and regulation, and should be met with greater interest.

On the bottom line however, Giucci stated, regional integration such as in the EAEU always makes sense. But in order to realise its economic potential, the EAEU must cut back on inward and outward protectionism if it wants to produce tangible economic benefits for the member states.

The presentation was followed by a panel discussion including representatives of the EEC Board, the Ministry of Foreign Affairs of the Russian Federation, the Federal Foreign Office, the diplomatic corps of the EU and the Republic of Kazakhstan. Among the 80 invited guests were representatives of the public sectors, diplomatic corps and international institutions.

Presentation: “The Eurasian Economic Union. Analysis from a trade policy perspective”