'Plans to create a Eurasian Economic Union by 2015 are unrealistic'

Sat 17 December 2011 06:12 GMT | 10:12 Local Time

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News.Az interviews Professor Julian Cooper, Centre for Russian and East European Studies, University of Birmingham.

Do you believe in Russian WTO accession in the nearest future? May it be any additional obstacles after the Russian-Georgian dispute has been overcome?

Yes, it now appears almost certain that WTO Council will approve Russia’s accession on Friday, 16 December. After that, the decision must be ratified by the State Duma in Russia within six months and then membership can start with a month. I do not think that any issues arising from the Russia-Georgia dispute will have an impact on Russia’s WTO accession or its future membership. Georgia is a member of the WTO and the country’s leadership clearly appreciates that it is in their national interests to have Russia within the organisation.

By the way, each of them, I mean Russia and Georgia, estimate this agreement concerned Russian WTO accession as their own victory. What is your own opinion on this issue? May the border control in Abkhazia cause problems in the future?

If both Russia and Georgia consider that the agreement that was reached was their own victory then that indicates that it was a good compromise and likely to last. As for the future, this is difficult to predict as it is not clear that the situation in Abkhazia and South Ossetia is entirely stable. But if new problems arise then they are likely to go beyond the narrow issue of WTO membership.

What can you say about new Russian integration project - a Eurasian union with participation of some post-soviet republics? Can't it repeat a sad experience of other ideas - CIS, Russia-Belorussia union etc?

The idea of creating a Eurasian Economic Union has been around since the mid-1990s and was originally proposed by President Nazarbaev of Kazakhstan. It is true that earlier CIS initiatives for economic integration have met with little success, with the result that most economic issues have been dealt with on a bilateral basis between CIS member economies. The Customs Union represents a step forward in so far as it has some real substance and is based on WTO principles. This means that the individual countries joining the Union do not put their existing WTO membership at risk or complicate future accession. Indeed, for Belarus, still far from accession, adaptation to the requirements of the CU should facilitate eventual acceptance into the WTO.

Clearly, Russia, Kazakhstan and other  members of the Eurasian Economic Community have learn lessons from past failures and now understand that the pursuit of economic integration has to be a careful prepared, step-by-step process. In my view, current plans to create a Eurasian Economic Union are still far too ambitious and the schedule – a Union by 2015 – unrealistic.

Azerbaijan hasn't joined yet the Free trade zone between CIS countries. Is it a mistake? What preferences may it bring to the member states?

As yet there is no functioning CIS free trade area, except at a purely rhetorical level, so I do not see any issue for Azerbaijan. Whether it would be in Azerbaijan’s interest depends to a large extent on the country’s trade orientation. For Belarus, with over half its trade turnover with other CIS countries, including 45 per cent with CU partners, the benefits are clear. For Kazakhstan, with a more diversified trading regime, the benefits are less clear, but according to World Bank research Kazakhstan may be the principal beneficiary from the CU as it has a more competitive, business friendly, economy than either Russia or, even more so, Belarus.

Azerbaijan now also has a diversified trade regime. In 2010, according to UN data, Russia was only the eighth largest export partner, less significant than Indonesia and Ukraine. However, Russia was the largest import partner, although Turkey and China have been catching up quickly in recent years. While applying to join in 1997, Azerbaijan is not yet a member of the WTO. Perhaps the best policy would be to pursue accession energetically and then, once a member, review options, including the possibility of becoming engaged in CIS economic integration if analysis demonstrated that this would be to the country’s economic advantage.

Will the post-soviet states - members of Eastern neighbourhood policy - have to choose one day between the EU and CIS? Does the Free trade zone between CIS countries and free trade agreement with CIS contradict each other?

I see no fundamental contradiction between membership of a CIS free trade zone, CU, or even future Eurasian Economic Union, and the Eastern neighbourhood policy, with potential membership of an EU free trade area. While voices are sometimes heard in Moscow arguing for an either/or choice, EU or CIS (especially in relation to Ukraine), the reality is that Russia herself seeks a free trade agreement with the EU and sees no incompatibility with such a policy and the development of the CU and the Eurasian Union. Provided CIS integration is based soundly on WTO principles and is pursued primarily for economic reasons, there can be no real contradiction.

Perhaps the most difficult issue in any CIS integration project is Russia’s economic dominance. By GDP and population Russia is so much larger than any other CIS partner that any voting rights based on criteria such as those used within the EU inevitably grant Moscow an overwhelming say.

It is rather as if the EU consisted only of Germany, Cyprus, Lithuania, Estonia and Portugal. It is not surprising that in discussion of a future Eurasian Economic Union Kazakhstan has argued for ‘one country, one vote’. This issue of decision making power may yet prove to be the most sensitive in the future development of CIS economic integration.




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