Maxim Krans, political analyst Eurasian Union - a living reality of utopian pipe dream / SCO Shanghai Cooperation Organization

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Eurasian Union - a living reality of utopian pipe dream
13.01.2012 11:47 Maxim Krans, political analyst

The three countries of the Customs Union - Russia, Kazakhstan and Belarus - from the beginning of this year entered the Common Economic Space (CES) with many hopes and yet unsolved issues. Still, there are more hopes. At least for the fact that our countries in the nearest future will be able to create a basis for closer cooperation at the level of new interstate formation - the Eurasian Union.

The initiators of the CES have declared its main goal - to create conditions for stable and effective development of the economies of the participating countries and raising the living standards of the population. It is rather a declaration of intentions. But now it is necessary to fill it with real contents. Namely - to ensure genuine freedom of movement of products, services, capital and labor across the borders of the participant-states. In other words, to create a common market.

The author of the idea of such economic union by the right is considered to be the President of Kazakhstan, Nursultan Nazarbayev. He stated and substantiated this idea back in 1994 in his speech at Moscow State University. At that time it seemed to many as unrealizable and, to a large extent, utopian project. Indeed, at that time the centrifugal tendencies clearly dominated the former Soviet Union: most of the leaders of the newly formed states were trying to break away as far as possible from the former metropolis - Russia and to find new allies and partners outside the borders of the collapsed Soviet empire.

The path to the Common Economic Space was difficult and time consuming. Sometimes it seemed that its foundation - the Commonwealth of Independent States will soon fall apart or turn into some discussion-based, but solving nothing, club of presidents. And the idea of CES, agreement on the creation of which was signed by the presidents of Russia, Kazakhstan, Ukraine and Belarus in 2003, did not work right away - soon Kiev refused it, and the remaining participants of the project have not been able to agree on mutually acceptable terms for a new economic union.

And yet sober approach and the ability of some leaders of CIS countries to calculate the situation for years to come has prevailed. Even in the second half of the 90s of the last century, they perceived and approved the concept of diversified integration, proposed by the same President of Kazakhstan. According to this integration, without waiting for a consensus of all members of the Commonwealth, the concept emphasized the core states that are ready to go directly from talks and debates to the association itself. The others, according to this logic, were free to either develop on their own or to join a new union or collaborate with it in certain directions.

And so it eventually happened. In November of last year, Dmitry Medvedev, Nursultan Nazarbayev, and Alexander Lukashenko signed the document on the integration within the CES. In particular, they signed the Declaration of the Eurasian Economic Integration and the Treaty on the Eurasian Economic Commission, which starts to work since the beginning of this year, led by Viktor Khristenko. This commission will be a supranational body, comprising representatives from Russia, Kazakhstan and Belarus, and starting from July 1st, will replace the commission of the Customs Union. It will have the right to make decisions that will become mandatory for all three countries. By the way, since the new year 17 international treaties of the Common Economic Space, defining the general rules of the game, will already come into force.

In addition, starting from January 1st the court EurAsEC Court begins to work in Minsk, which will consider economic disputes not only between the member-states of CES, but also between individual companies and entrepreneurs. But six months ago we acquired a common external border and, the customs authorities of the three countries stopped customs control at internal borders.

From now on the Eurasian space has a huge common market with more than 165 million of consumers. In fact, common economic and legal environment for enterprises of the three countries is being created: single monetary policy, free movement of capital and joint support for agriculture, competition rules which are same for everybody, the ban on protectionism, free movement of goods across borders, unification of customs rules and tariffs.

In addition, each company registered in any of the states will actually use all the advantages of domestic producers, that is, in fact, national treatment. Although the for implementation of this program into practice it will be required to remove all obstacles to free trade regime, agree on a common customs tariff, non-tariff measures and principles of trade with third countries.

Finally, the rules of labor migration will change. Now, any employer will be able to hire employees from the partner countries without quotas and obtaining work permits, which do not have to register at the place of residence and are allowed to live in the neighboring country within duration of their contract.

In other words, the prototype of a confederation, which Mikhail Gorbachev was trying to create in the last year of his governing, is forming. Then the 12 Soviet republics could enter it. Now its only three. But Kyrgyzstan has already expressed its desire to join it. Perhaps it will be followed by Tajikistan, and possibly Armenia. And for the others the doors are open.

However, the Common Economic Space, as once was the Customs Union - is not the ultimate goal of the leaders of Russia, Kazakhstan and Belarus. This is only an intermediate step to creating of a genuine confederation - the Eurasian Union. According to their voiced plan, it shall be formed by 2015.

With a certain degree of probability it can be assumed that this plan will be implemented before the appointed time. But only under one condition: if the desire for unity will prevail over national self-interest, political ambitions and corrupt tradition. Otherwise, the EAC will become not a friendly multi-family house, but the same ugly communal apartment, which in the end, again, will be doomed to exchange.

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