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MIL OSI Translation. Region: Russian Federation –

The theme of the government hour is “On the prospects of integration processes within the framework of the Eurasian Economic Union”.

Alexey Overchuk spoke at a meeting of the Federation Council during the government hour. Photo by the press service of the Federation Council

From the transcript:

Dear Valentina Ivanovna! Dear Senators, Dear Colleagues!

Let me thank you for the opportunity to inform you about the work of the Government in the direction of integration into the EAEU in the Eurasian space.

When deciding on economic integration, countries set themselves the task of reducing the costs of producers and consumers in order to increase mutual trade. This leads to an increase in the availability of goods and services, an expansion of sales markets, an increase in employment, income and purchasing power of the population. Thus, the integration process creates more favorable conditions for the growth of the economies of the integrating countries. Achievement of this goal requires the participating states to reduce or eliminate trade barriers and equalize the financial and economic conditions of management, which is accompanied by the transfer of part of the powers to the supranational level.

Our integration process has its own characteristics. More recently, the EAEU member states were parts of one large country with a planned economy, a centralized management system and a population of 291 million people. There were deep cooperative ties between the republics of the USSR, and the created industrial facilities were designed for the market of a large country. Therefore, the current integration process is often perceived as an attempt to restore what was lost, which has both supporters and ill-wishers.

In December 2012, I want to quote this quote, US Secretary of State Hillary Clinton said: “There is an initiative to re-Sovietize the region. She will be called differently. It will be called the Customs Union, it will be called the Eurasian Union or something like that. But let’s not be wrong about that. We know what the real goal is, and we are trying to find effective ways to slow down or prevent it. ” It was 2012.

The period between 2012 and 2016 turned out to be difficult in the history of Eurasian integration. The collection of customs duties fell from $ 26.6 billion in 2011 to $ 10.7 billion in 2015. However, the economy of the EAEU member states has adapted: the volume of GDP of the EAEU member states in 2020 compared to 2016 in dollar terms increased by 17.3%. At the same time, I would like to note the indicators of the EAEU member countries: Belarus – 25.7%, Kazakhstan – 24.7%, Russia – 16.1%. Even in Armenia – the war and Kyrgyzstan – that survived the revolution in a difficult pandemic year, GDP growth in five years was 20% and 13.2%, respectively. At the same time, similar indicators of these two countries for a favorable 2019 were 29.5% and 30.9%. Integration has created additional development opportunities for these countries, and it’s hard to argue with that.

Stress testing of the economies of the EAEU member states in 2020 demonstrated their viability. The economic decline in the EAEU space was 2.9%. For comparison: the GDP of the European Union has a decline of 6.3%, the eurozone – 6.6%. In the first quarter of 2021, the growth of mutual trade has already increased by 16.7% and demonstrates the confidence of economic operators in the integration process. The expected growth of the Union’s economy in 2021 will be 3.2%.

The economic union is seven years old. All these years, the transformation of the Customs Union into an economic union has been carried out, where the free movement of goods, services, capital and labor resources must be ensured. Realizing these four freedoms is fundamental to ensuring barrier-free access to a market of over 184 million people. By expanding sales markets for our producers, we thereby create stable conditions for the growth of our economy and the economies of the EAEU member states.

The member states have already transferred to the exclusive competence of the union the issues of customs and tariff regulation, application of protective measures, technical regulation and protection of competition in cross-border markets. At the same time, individual exemptions and national competencies remain for the Member States in these areas.

In the EEC Council, governments are systematically working to eliminate barriers, exemptions, restrictions from the economic union regime. At the beginning of 2020, 19 barriers, 37 restrictions and 14 exceptions were qualified in the register of barriers, exemptions and restrictions on the EAEU internal market. As of the end of 2020, the number of barriers in the registry had dropped to 12 barriers, 35 restrictions and 11 exemptions. This was the largest reduction in obstacles in the union’s history since 2016.

In 2018, the Customs Code of the Union entered into force, a unified customs tariff was adopted, but the member states still have the right to apply temporary non-tariff measures unilaterally. The unified commodity nomenclature of the union has also been adopted.

The Eurasian Commission adopted 49 technical regulations, of which 43 entered into force. They cover more than 50% of the products produced in the Union or 85% of the products exchanged in the EAEU. 11 technical regulations are under development.

A single market for services is gradually being formed for individual sectors of the economy, providing for unhindered access of service providers to each other’s markets on the basis of the principle of national treatment. The single market for services currently operates in 53 sectors and covers 57% of manufactured products. The work on the formation of a single market for services will continue.

Conditions for free circulation of capital are improving in the EAEU. The use of our national currencies in mutual settlements is gradually increasing. In the trade turnover between the EAEU countries, there is a tendency towards an increase in the role of the Russian ruble. Over the past five years, its share in the structure of payments increased to 72.5% in 2019.

Interstate financial institutions operate – the Eurasian Development Bank, the Eurasian Fund for Stabilization and Development. The EDB’s new strategy focuses it primarily on supporting integration projects.

Integration has reached the greatest depth in the labor market.

An important step towards the development of the EAEU was the approval by the heads of state in December 2020 of the Strategic Directions for the Development of Eurasian Economic Integration until 2025.

The adopted document contains 332 measures, and the implementation of the strategy will require the conclusion of more than 50 international treaties, as well as the development and approval of over 180 regulations.

It should be recognized that the strategy is a compromise document adopted by consensus. Its implementation will make it possible to achieve such a level of integration that the country was ready to go to, which saw in it the greatest number of threats to its national sovereignty. Therefore, the adopted strategy does not speak today about the unification of legislation and measures of responsibility for violations of their requirements. There is still work to be done on this.

At the same time, modern challenges are pushing the EAEU states towards closer integration. These challenges include digitalization, the problems of the climate agenda, the pandemic and its socio-economic consequences.

Digital transformation has an impact on the economy of the union, including the markets for goods, services, capital, labor. The changes will affect all four freedoms proclaimed by the Treaty of Union, and we intend to respond to these challenges, first of all, by developing our own digital platform of the EAEU. The first results are already there and benefit people.

In order to restore business activity, an electronic application “Traveling without COVID-19” was developed and launched. More than 300 thousand people in the EAEU have already used it. And we are committed to ensuring that the pandemic does not interfere with people in communicating between our countries.

Our efforts are also aimed at combating illicit trafficking in industrial products, which involves ensuring the traceability of goods.

In our work, we pay special attention to the formation of comfortable conditions for searching for vacancies in all EAEU member states, obtaining the necessary public services, permits, documents in digital form. In the near future, a platform for finding a job in the EAEU is being launched.

The climate agenda is fraught with serious challenges for the economies of our countries. This is not about the warming in the world, although about it too. It should be accepted that in order to reduce carbon dioxide emissions, and most likely, in order to create conditions for new economic growth, developed countries have decided to abandon not only hydrocarbon energy sources and internal combustion engines, but also from goods that produce a significant carbon footprint. … The expected implementation measures for this policy will be in the nature of trade barriers. New restrictive measures will affect the main items of Russian exports. This will lead to the need for a large-scale restructuring of the economy.

The EAEU will have to develop and adopt a common economic policy in this area and, thus, use the collective bargaining resource to interact with such major economies as the EU, the United States and China. We are starting to move these issues in the EAEU and in the EEC Council.

The pandemic has brought our countries closer together. We agreed without delay on duty-free import and ban on export of medicines, medical products, personal protective equipment, as well as a number of socially important food products. The pandemic also prompted discussions for more systemic solutions aimed at protecting our common market and its consumers. We are beginning to discuss the possibility of creating an emergency food fund for the union.

The above challenges relate to each of the EAEU countries, but none of them is able to respond to them independently. We have to convey the understanding of the importance of these problems and the effectiveness of their joint solutions to our partners in the EAEU.

The second group of factors that will contribute to the development of the integration process and rapprochement concerns the implementation of large investment projects.

First of all, these are investment projects in the field of transport and logistics. The geographical location of the EAEU – between the markets of Asia and Europe – is the source of our natural resource rent. Therefore, the transit potential of the EAEU must be realized.

Work is underway to implement projects for international transport corridors, including North-South, East-West, and the Northern Sea Route. At the same time, new digital solutions are also being developed and implemented.

If we talk about the direction “North – South”, then here, too, new opportunities appear. There are limitations and difficulties, but there are prospects for the development of routes connecting us with India, Pakistan, Iran, Afghanistan.

The implementation of investment projects based on the principles of industrial cooperation contributes to the strengthening of our integration. With Belarus, we are engaged in projects in the fields of radio electronics, automotive, agricultural and road-building engineering. Industrial ties with Kazakhstan are developing in the areas of automotive, aircraft and agricultural engineering. Industrial cooperation aimed at creating value chains gives our partners access to the development of high technologies and allows them to use their export potential, which significantly exceeds the consumer capacity of their domestic markets. Our partners can receive such economic advantages only by being in the Eurasian Economic Union.

There are also big challenges in the energy sector. Until 2025, the implementation of the adopted “road maps” is coming, the harmonization of legislation with access to the creation of common markets for electricity, gas, oil and oil products.

Energy issues are also related to the use of water resources, which are of particular importance for the Central Asian states – potential candidates for membership in the Eurasian Economic Union.

The most interesting in scale and content task is the creation of a wider integration contour of the Greater Eurasian Partnership, which can become a platform for interconnection and conjugation of integration processes on the continent, such as the Belt and Road, the European Union and ASEAN. This cooperation is still at its initial stages, but we intend to work together with partners on its development. It is on this track that cooperative opportunities open up, which President of the Russian Federation Vladimir Vladimirovich Putin talks about in his article “To be open despite the past”.

In conclusion, I would like to note that Eurasianism is an idea that did not mature today, not with the emergence of the EAEU, not with the emergence of the Soviet Union, and not even with the emergence of the Russian Empire.

This civilizational space, where people representing different ethnic groups live together, trade, unite in unions, is more than a thousand years old. During this time, Eurasianism has become part of our common cultural code that unites all the peoples of the region.

The successful development of the union and its positioning as an integral part of the world economy is one of the main tasks of our Government. I am sure that our meeting today will also serve to bring it to life.

Thank you.

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.

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