Given that the idea of the Eurasian Economic Union (EAEU) was first proposed more than two decades ago by President Nursultan Nazarbayev, 2015 was hardly the best year for the initiative to finally launch. Weakening global growth and falling oil prices meant difficulties for the countries involved and increased tensions between Russia and the West fuelled suspicions over how the trade block might develop.
These challenging times mean a considered verdict on what the EAEU can achieve will have to wait far longer than its first anniversary on Jan. 1, 2016. But as Kazakhstan took over the chairmanship for 2016, there are already hopeful signs for the organisation and its outward relations.
Real progress, for example, has been made in putting in place institutions to run the EAEU. Reforms have been introduced that will create a genuine single market to allow the free flow of goods, services, investment and skills. The founder members of Russia, Kazakhstan and Belarus have already been joined by Armenia and Kyrgyzstan.
This has increased the size of the market within the EAEU to 182 million consumers. Unsurprisingly, the ability to access such a large market has already attracted the attention of other countries.
2015 saw the signing of the first bilateral free trade agreement with Vietnam. Hopes are high that other countries will take similar steps in the coming months, including Israel with which talks are already under way. In fact, the first year has seen the EAEU already well on the way to becoming a fully-fledged member of the international community.
The new powerhouses of China and India, for example, have wasted no time in forging trade and economic relations with the EAEU, as have Iran, Egypt, Israel and Latin America. The prospects in terms of increased trade as a motor for growth are exciting.
These relations show that those who feared the EAEU would look inwards rather than be open to the world have been proved wrong. This continued approach has been underlined by Kazakhstan’s accession to the WTO in 2015.
The last year has also eased concerns that economic integration would inevitably lead to political integration. As the chairman of the Eurasian Economic Commission said last month, the EAEU is an economic project without a political dimension. It is a partnership of sovereign nations whose focus is on how to improve the environment for businesses and investment and remove barriers to trade both within member countries and its outside partners.
As well as the improved bilateral links already being forged, it is important that cooperation with similar trading blocs is fostered. In every continent, we see countries coming together economically. It is a recognition that in today’s global economy, no nation – no matter how large or wealthy – can hope to thrive on its own.
Global prosperity depends not only on how effectively these blocs operate individually but how they work together. It is why the EAEU has made improving cooperation with the European Union a top priority. Putting in place the right foundation for this dialogue will be high on the agenda for Kazakhstan’s chairmanship over the next year.
It was never going to be the easiest of starts for the EAEU. But despite a difficult global environment and the hard work ahead, the fledgling organisation is beginning to find its feet. As every parent knows, that is the most important landmark in the first year.
