Transitional Year for EAEU: Armenia’s Chairmanship11 m. | 2019-12-26
2019 was the anniversary for the EAEU. It’s been five years since the signing of the “EAEU Treaty” and twenty-five years of the Eurasian integration idea. Since January 2019, the chairmanship passed from Russia to Armenia. This was a good opportunity in terms of increasing Armenia’s reputation within the organization, having an influence on the agenda, increasing the efficiency of Armenia’s membership and pushing the priorities.
T he Presidency of Armenia in EAEU coincided with the formation of a new legislative and executive power in the country. Before the snap parliamentary elections on December 2018, the new authorities of Armenia announced that the country will continue its active role in the EAEU. After the elections, Armenia’s approach remained unchanged: according to the RA Government Program adopted on February 8, 2019 the latter will actively work “to ensure Armenia’s active and proactive participation in the Eurasian Economic Union and in the Collective Security Treaty Organization thus contributing to increase the efficiency of these structures”. It’s noteworthy that on the 7th convocation of the National Assembly, there is a full consensus among the political forces on Armenia’s membership to the EAEU and the Standing Committee on Regional and Eurasian Integration of the NA is the regular manifestation of the above-mentioned circumstance. The Committee is also an additional platform for studying various issues related to the institutes activities, such as the legislative field’s harmonization of the “Five”. At the same time it underlines the importance of the Union for Armenia and the readiness to develop inter-parliamentary relations. This year the committee worked actively with the RF State Duma, organized parliamentary hearings and discussions.
RA Chairmanship Priorities in EAEU
O n January 25, 2019, Armenia officially presented to the Board of the Eurasian Economic Commission the Chairmanship priorities of Armenia in this structure. During Armenia’s chairmanship, the implementation of the EAEU key goals and established agenda continued. First of all it refers to the full realization of the four freedoms in the EAEU, the increase in mutual trade and investment volumes between member states and the elimination of its obstacles, provision of free movement of services and labor. In this regard, the development and diversification of transport infrastructures within the whole EEU structure is of particular importance, which will not only contribute to the increase in trade turnover between the Union’s member states, but also to the export of the Union’s products to foreign markets. The legislative field’s harmonization of the member states should also serve this purpose, which will help to reduce the obstacles for the states and businesses.
The next important priority of the structure was the digitalization of the economy, towards which a considerable amount of work was done in 2019. Taking into account Armenia’s potential in high technologies, our country may also contribute to the realization of a digital agenda, which will significantly reduce customs and trade barriers in the Union.
International cooperation was among the important directions for the EAEU in 2019. EAEU makes efforts both to deepen and expand the integration. An active cooperation is carried out both with the third countries of the EEU and with other economic integration structures and international organizations, as a result of which the EAEU geography expands every year.
Strengthening the level of confidence within the structure is also important for Armenia, which can be viewed in two ways. First, the disagreements between the member states of the Union may indirectly harm the structure’s activity. Second, the atmosphere of solidarity and mutual trust is important in the works of the EAEU bodies.
EAEU Yerevan Summit and the Union’s Success in 2019
T he active work for the implementation of the structure’s priorities continued in 2019. There were three meetings of the Supreme Council (in May, in Nur Sultan, in October, in Yerevan and in December, in St. Petersburg) and of the Intergovernmental Council (in April, in Yerevan, in September, in Cholpon-Ata and in October, in Moscow) throughout the year.
The EAEU Yerevan Summit which took place on October 1, was of great importance both in terms of the EAEU, Armenia’s foreign policy activity and raising Armenia’s reputation in the structure. The session was remarkable for the EAEU for its serious practical achievements, features and innovations.
The main innovation of the EAEU Yerevan Summit was the conference on the “Transit Potential of the Eurasian Continent”, which was attended not only by the EAEU officials, expertise and business areas but also by heads of the States, who were attending the Summit. The Conference was mainly aimed at creating a unified transport area and at increasing the efficiency of transit processes. The project “One Belt, One Road” Chinese Initiative is also worth attention, which can be combined with the Eurasian new initiatives on the way to implement the idea of “Greater Eurasia”. This event was held for the first time within the EAEU Summit. The Heads of the Member States called the conference effective, decided to make the conference an annual event and held it in the EAEU chairmanship country.
The concept of forming the EAEU common financial market, which was one of the issues on the agenda was approved during the Summit. The process of forming the common markets of oil, gas and petroleum products also continued in 2019, which is among the EAEU main priorities as well. During the Yerevan Session, the Supreme Council approved the EAEU Member States draft law on harmonization of legislation in the field of gas transportation and supply between the Member States. The issue on gas and oil price between the member states still remains quite controversial and regularly causes conflicts between the “five”.
One of the main features of the Yerevan Summit was the participation of an unprecedented number of heads of states. Besides the heads of the “five”, the Presidents of Iran and Moldova, the Prime Minister of Singapore were also in Yerevan, which clearly shows the growth in international interest towards the work of the structure. The main achievement of the meeting was the signing of a Free Trade Zone Agreement with Singapore, in the preparation process of which Armenia made a positive contribution.
Being the head of the EAEU chairmanship country, the Prime Minister of Armenia Nikol Pashinyan in addition to bilateral relations discussed the cooperation issues between the EAUE and Singapore besides his official visit to Singapore in July, 2019.
Generally, the EAEU has made great progress in terms of international cooperation in 2019. The next agreement on Free Trade Zone with Serbia was signed on October 25, in Moscow, within the framework of Intergovernmental Council’s meeting. Serbia already had a free trade regime with Russia, Belarus and Kazakhstan, therefore the agreement will play an important role for Armenia and Kyrgyzstan, making the Serbian market more affordable. Armenia’s export products may include alcohol, cigarette, food industry and agricultural products.
The Interim Agreement Leading to the formation of a free trade area with Iran and the Agreement on Economic and Trade Cooperation with China entered into force in October. Positive dynamics in economic relations between Iran and the EAEU was already noticeable in recent years. According to Eurasian Economic Commission the 2018 exports from Iran to EAEU countries increased by 27% and in January-August, 2019, the exports from the EAEU to Iran increased by more than 17%. The entry into force of the agreement is a new impetus for Iran-EAEU trade turnover, especially for exporting to Iran. As is known, Iran traditionally sets high import duty, making foreign goods uncompetitive. Currently customs privileges will be granted for 500 products to the EAEU member states, and the EAEU production may become competitive in Iranian market. The list of products with privileges includes the main product types, which the EAEU exports, mainly agricultural and industrial products. The EAEU entry into the Iranian market will create new opportunities to further enter Middle East markets. The launch of the free trade zone between EAEU and Iran will be particularly beneficial for Armenia.
It’s no coincidence that the negotiations with Iran were entrusted to Armenia, taking into account that Armenia is the only EAEU country having a common border with Iran, as well as the rich experience of Armenian-Iranian economic cooperation. Besides the increase in trade volume, Armenia can have a major role in goods transportation. In this regard, Armenia should pay a great attention to the provision of infrastructures. Armenia should also be viewed as a platform for processing Iranian production and exporting them to EAEU and EU countries.
As to the agreement with China, it doesn’t envisage customs duty reduction but simplification of trade procedures, increase in transparency level, development of multilateral relations. China and EAEU have a great potential for cooperation, especially within the frameworks of “One Belt, One Road” initiative. It is envisaged to develop this potential in the coming years.
In 2019, the development of cooperation was also continued in other areas, including both European, Asian, Latin American and African countries. Technical dialogue is carried out with the European Union. Individual European countries are also interested in cooperating with the EAEU. Industrial and business circles of Hungary, the Netherlands, Italy and other countries have been actively working with the European Economic Commission in 2019, getting acquainted with the opportunities for economic opportunity.
Belarus Will Preside in 2020
I n 2020, Belarus will preside over the EAEU and the post of the Chairman of the Eurasian Economic Commission Board will pass to Belarus representative Mikhail Myasnikovich. Therefore in 2020, there will be more expectations in the EAEU especially from Belarus. The expectations are also high in terms of international cooperation. This year active negotiations were held with India, Israel and Egypt. According to EAEU officials, free trade area agreements are expected to be signed with this three countries in 2020. Moreover, it should be emphasized that Armenia has the primary responsibility for the negotiations both with Iran and Egypt.
Although the EAEU is still “5 years old” and is in the stage of common market formation having numerous unresolved issues, the steps are taken in the Union to make the structure more accessible and attractive for the citizens of the “five” and to make its activity more visible and inclusive. Strengthening the economic cooperation, there is also created a basis for cooperation in social and humanitarian fields, which should be beneficial not only to businesses, but also for the citizens of EAEU countries. For instance the negotiations on reducing the roaming prices between the EAEU countries already started and it is envisaged to totally eliminate the roaming. This process took 10 years in the EU. The signing of an agreement on creating a single tariff area for such services may become the first step towards eliminating the roaming.
Another important area around which the works should continue in 2020, is the creation of Eurasian companies, which Russia and Belarus have already implemented. This practice is also planned to be spread among the other EAEU members. In this context, the creation of European brands may also be considered. For instance, it can be the jewelry brand in case of Armenia.
The “Job Without Borders” search system will be a new initiative, which will give the citizens of the “five” an opportunity to search for a job in other member countries of the EAEU. The European Economic Commission also suggested to form a common Eurasian social area, which will facilitate citizen’s mobility, employment, health, retirement and other issues.