What is EEU?

What is it?

The countries that were former Soviet republics maintained political and trade ties with each other. In the early 1990s, the CIS was formed to strengthen the partnership between them. During all these years, some old agreements were transformed, and new ones were concluded.

The Eurasian Economic Union was formed as a new international association with its own rules and regulations. The promising project was designed to give a further incentive to the development of the republics.

In 1994, the leader of Kazakhstan proposed to create a new association based on the CIS — a system of economic and defense mutual assistance. At the same time, it was assumed that the principles of voluntariness must be preserved.

The idea is based on mutual support in the development of the member countries of the association. Compared with developed countries, the post-Soviet countries do not have rich experience in competing. To preserve the achievements in the economy, some of the CIS republics have signed agreements on benefits for each other.

Goods and people move through the territory of the EAEU member states in a simplified and convenient manner. The obligations and requirements are minimal, and the entire economic partnership group recognizes a joint quality control system. From time to time, representatives of the association propose to create a Union’s own currency and a supervising body in charge of defense and management of all the Union. Such ideas do not find general support: interference in politics and the security system within the economic integration framework is not allowed. The Union remains only a tool for convenient mutual trade. But, still, there are a lot of advantages for the members.

The EAEU opens up opportunities for the countries that lost their markets in the early 1990s. The single territory makes internal, partner, and international trade for participants easier. The taxes, duties, and costs are optimized.

Members tend to reduce settlement transactions in dollars and euros. Priority is given to the Russian ruble, and the local currency is also used in the internal market. Mutual export and co-production agreements help to solve sales problems. The goods produced by the Union countries find buyers in the unified economic zone because they are sold at an affordable cost.

The EAEU member states can also act more confidently in the international market: the status of a member of a large association with established standards, requirements, and obligations increases their importance. Otherwise, the Union’s partner program will provide reserves and assistance to maintain stability: losses from unsuccessful transactions will be minimized.

The Union assists small businesses. It is difficult for small businesses to develop without government support. The necessary equipment does not always have an affordable price, competition with the giants of the economy is unbearable and leads to bankruptcy. Economic cooperation allows you to purchase the necessary products from the partner state at an affordable price. There are fewer obstacles for internal and partner production. Measures to support small organizations and their competitiveness ensure that small companies will have something to produce.

Over the decades of working in the market economy, the partners have gained invaluable experience and developed ideas for improving internal policy. Within the framework of the EAEU, they can combine all the accumulated experience, evaluate all the options and choose the best ones.

Perhaps there will be an alternative to the raw materials and agricultural economy — the more participants, the more ideas.

On the other hand, although the leaders of the EAEU member states assured that the Union involves only mutual economic assistance, it is hard to achieve all the goals without political interference.

For political purposes, the leaders of the EEU countries often use their status to expand foreign influence or argue in interstate negotiations. Economic integration is becoming an instrument of political pressure.

In addition, the US economic pressure on Russia has shown that Belarus' membership in the EEU is a convenient way to resell goods from Europe and America to the Russian market. Kyrgyzstan does the same operations with semi-legal and low-quality products from China and India in an attempt to extract profit. Such steps undermine the economy not only of the Russian Federation but also of the "reseller" countries: local products cannot compete with cheaper and mass-produced goods from abroad.

To sum up, difficulties will inevitably accompany the development of such a large coalition as the Eurasian Economic Union.

However, the project has good prospects: its members need each other, and the EAEU has concluded good agreements with China and Vietnam. Some European, South American, and Asian countries are interested in cooperation.

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