What Is the Eurasian Economic Union (EAEU)?
The Eurasian Economic Union (EAEU) is an international economic union and free trade zone comprising countries located in central and northern Asia and Eastern Europe. The founding member states of Belarus, Kazakhstan, and Russia established the union by treaty in 2014 and officially implemented the agreement beginning on Jan. 1, 2015.
It is estimated that nearly 200 million people live within the member states and that EAEU countries have $5 trillion in combined GDP.
- The Eurasian Economic Union (EAEU) is a free trade agreement that came into being in 2015 to increase economic cooperation and raise the standard of living of its members.
- Member countries include Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan.
- Unlike the European Union (EU), the EAEU does not share a common currency.
Understanding the Eurasian Economic Union
The Eurasian Economic Union was created in part in response to the economic and political influence of the European Union (EU) and other Western trade agreements. Member states of the EAEU include Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. The key objectives of the organization are to increase cooperation and economic competitiveness for the member states, and the promotion of stable development in order to raise the standard of living in member states.
The EAEU ensures the free movement of goods, services, labor, and capital between the states, and provides for common policies in the macroeconomic sphere, transport, industry and agriculture, energy, foreign trade and investment, customs, technical regulation, competition, and antitrust regulation. Unlike the treaty forming the Eurozone, the treaty forming the EAEU has not to date established a single currency.
The EAEU heads of state comprise a governing body known as The Supreme Eurasian Economic Council, and the executive body which oversees day-to-day operations is known as the Eurasian Economic Commission, an analog to the European Commission. The Court of the EAEU serves as the judicial body.
History of the EAEU
Following the dissolution of the Soviet Union in 1991, the economies of the former Soviet republics were in shambles due to decades of mismanagement, and many Eurasian republics experienced abrupt economic turmoil as they adjusted to the post-Soviet era. The political breakup of the Soviet Union also broke up many of the productive economic relations between these countries.
However, the end of the Soviet Union as a political entity did not mean that the historical ties between Russia and the countries known as the “Near Abroad” had evaporated nor that they could not still reap the gains of comparative advantage and trade or the benefits of economic integration. New forms of economic cooperation were needed.
To this end, talks began between states in the region regarding economic cooperation. In March 1994, Kazakhstani President Nursultan Nazarbayev first suggested the idea of establishing a trade alliance during a speech at Moscow State University.
By June 1994, a detailed plan for a Eurasian Union was drafted and submitted to heads of state. Belarus, Kazakhstan, and Russia signed The Treaty on the Customs Union in 1995, laying the groundwork for economic cooperation between the member states. Subsequently, over the next decades, a series of additional treaties strengthened economic relations between Eurasian states, all of which had formerly been members of the Soviet Union.
In Dec. 2010, The Declaration on Establishment of the Single Economic Space of the Republic of Belarus, the Republic of Kazakhstan, and the Russian Federation was signed, establishing the foundation for the EAEU. This treaty, which entered into force in 2012, ensured the free movement of goods, services, labor, and capital between the states.
On May 29, 2014, the EAEU was formally established when founding member states Belarus, Kazakhstan, and Russia signed the Treaty on the Eurasian Economic Union and this treaty was entered into force on Jan. 1, 2015. Armenia and Kyrgyzstan signed EAEU accession agreements in Oct. 2014 and Dec. 2014, respectively. On Jan. 2, 2015, The Treaty on the Eurasian Economic Union entered into force for Armenia, and on Aug. 6, 2015, it entered into force for Kyrgyzstan.
Future of the Eurasian Economic Union
Russian President Vladimir Putin signaled his ultimate goal is to extend the Eurasian Economic Union to all of the post-Soviet states. This would necessarily exclude the three Baltic states (Lithuania, Latvia, and Estonia) who have already instead joined the European Union.
Tajikistan, Uzbekistan, Georgia, Moldova, Ukraine, and Turkey have each been offered membership. However, Georgia, Moldova, Ukraine, and Turkey have also been offered EU membership. Pro-Russian break-away regions in Georgia, Moldova, and Ukraine have all made moves toward integrating with the EAEU. These two economic unions are, in effect, locked in competition over the economic integration of Eastern Europe.