Kazakhstan, Russia and Belarus sign Eurasian Economic Union Treaty
The three Presidents of Kazakhstan, Russian Federation and Belarus met in the Kazakh capital of Astana and signed the Eurasian Economic Union (EEU) treaty yesterday, creating a new market with a population of 177 million people and a combined GDP of around £1.38 trillion ($2.32 trillion; €1.7 trillion). That compares with 505 million people in the European Union (EU) and a £10.6 trillion ($17.7 trillion; €13 trillion) economy. Some experts have predicted that the EEU could lead to a 25% growth in GDP in the member states by 2030.
The new EEU will see the free transit of goods, services, capital and workforces and will coordinate the three financial systems but it won’t have a single currency. Russia’s President Vladimir Putin observed that the treaty will account for one fifth of the world’s gas reserves and around 15% of all oil reserves.
The Union will start functioning on 1st January 2015 and by then might also include all or some of Armenia, Kyrgyzstan, Tajikistan and Uzbekistan, all of whom have expressed interest in joining. Originally President Putin had hoped that Ukraine would also be part of the EEU.
The concept of a Union was first proposed by the Kazakh President Nursultan Nazarbayev back in 1994 but talks have hit a number of problems over the years not least of which surrounded arguments about the nature of the union and whether it should be political as well as economic. Belarus’ President Alexander Lukashenko nearly scuppered the signing of the treaty last month when he insisted that political elements be withdrawn. The treaty still has to be ratified by the three parliaments.
Below are the three press statements, with more information about the EEU, starting with the Kazakh statement, then the Russian federation statement and finally Belarus.
The press release as published on the websites of the Kazakhstan Central Communications Service is as follows:
“EEU Treaty signed by Presidents of three countries in Astana
The Treaty on the establishment of the Eurasian Economic Union was signed today at the sitting of the Supreme Eurasian Economic Council by the Heads of Kazakhstan, Russia and Belarus – Nursultan Nazarbayev, Vladimir Putin and Alexander Lukashenko.
The document consists of 4 parts, 28 sections, 118 articles and 32 annexes (900 pages in total). The Union is expected to start functioning on January 1, 2015.
The treaty is based on the legal framework of the Customs Union and Single Economic Space. The in-force norms of the CU legislation were optimized, improved and brought into compliance with the WTO rules. The treaty eliminates existing barriers hindering free movement of goods, services, capital assets and manpower.
The treaty has two parts. The first is institutional and the second is functional. The institutional part specifies strategic goals and objectives of the Eurasian integration and defines the legal status of the union as an international organization.
The functional part regulates the mechanisms of economic cooperation and outlines specific obligations in the integration sectors.
As President Nursultan Nazarbayev said opening the sitting that all the basic aspects inherent to international organizations are reflected in the treaty. Besides, the document enshrines the principles of sovereign equality of the countries, territorial integrity and respect for the peculiarities of the political order of the union member states.
“It is important that the decision making process is based on the consensus principle at all levels. Thereat, the vote of every country is deciding. The personnel policy in the union’s bodies will be based on equal representation of the parties and competition in order to select the most qualified specialists for this job,” the President said.
“I would like to emphasize one more time that the Treaty aims to help improving people’s welfare and living standards. I am confident that the establishment of the EEU will be an impetus for development and modernization of our economies,” the President resumed.”
The press statement as published on the Russian Federation presidential website is as follows:
“Press statement following the Supreme Eurasian Economic Council meeting
May 29, 2014, 12:20 Astana
PRESIDENT OF RUSSIA VLADIMIR PUTIN: Friends, colleagues, ladies and gentlemen,
I would like to stress that the governments of Russia, Belarus and Kazakhstan jointly with the Eurasian Economic Commission managed to complete the drafting of the Agreement on the Eurasian Economic Union as was planned – by June 1, 2014.
As you may know, this process was launched in 1994, when Mr Nazarbayev first described this idea speaking at Moscow State University. It was then developed at a variable pace. In 2009, the President of Kazakhstan yet again gave it additional impetus and we agreed to intensify our efforts in this direction.
I am happy to say that there is popular consensus on this idea in Russia. Whoever was President (back then it was Dmitry Medvedev) we always actively supported this and continued the work on it at Government level.
The Agreement we signed is a truly historical milestone that opens up broad prospects for the development of our economies and improving the well-being of our countries’ citizens.
Russia, Belarus and Kazakhstan are moving towards a completely new level of cooperation by creating a common space where goods, services, capital and work force can move freely. The three states will follow a coordinated policy in such key branches of the economy as energy, industry, agriculture and transport.
This was not an easy job and until now it was difficult to come to agreement on all these issues. We moved along, even though it was with heated disputes, I would not say with rows, but with serious disagreements. We will continue to move ahead in the same way – based on mutual understanding and a desire to achieve compromise acceptable to all.
We are essentially creating the largest common market on CIS territory (with over 170 million people) with an enormous production, research and technological potential and huge natural resources.
It is not surprising, and I will dwell on it a bit later, that major economies are already showing direct interest in this union. Wherever I go and whomever I meet – everyone wants to know how to establish relations with the new Eurasian Union.
A new economic organisation has appeared on the international arena, one that has full juridical personality and acts based on the principles of the World Trade Organisation. It is important that the transfer of certain authority to supranational agencies of the Union is of no detriment to the sovereignty of our states.
Mutual benefit from integration has already been demonstrated in practice. The economic ties between Russia, Belarus and Kazakhstan are expanding, their trade structure is improving, the share of high-tech goods in the overall trade structure is increasing and our countries are becoming ever more economically competitive in the world.
In the past three years trade turnover within the Customs Union has gone up by 50 percent – that is by $23 billion (in 2013 it amounted to $66.2 billion). Belarus and Kazakhstan together come in third in the overall trade balance of the Russian Federation (after the EU and China). However, let us compare: our trade turnover with the EU is 440 billion, and with China it is 87. Belarus and Kazakhstan are much smaller in terms of economic volumes than these two world economic giants are, but they rate third in their trade with Russia. This shows that we have reached this level mainly due to our integration.
With this in view, we have considered in detail with our partners today how we can use the potential of the Eurasian Economic Union to enhance the flow of goods and investment and expand industrial and technological cooperation.
Special attention is given to improving the business climate. Russia, Belarus and Kazakhstan intend to stimulate responsible competition on the Union market. At the same time, we will efficiently protect the interests of the consumers and the businesses of the member states.
For the future, we have set ourselves the goal of creating a common financial market. The absence of barriers in the flow of capital will make it possible to diversify risks and improve the quality, accessibility and reliability of financial services.
Stage-by-stage harmonisation of the currency policy will serve to enhance the stability of the financial systems of the Union member states and will make the national money markets more predictable and better protected from exchange rate fluctuations, and will enhance our sovereignty as well.
The citizens of our countries should be able to fully assess the benefits of Eurasian integration. They will receive the right to work freely in the three states without having to obtain any work permits.
Of course, we touched upon the issue of expanding membership in the Eurasian Union, as Mr Nazarbayev already mentioned, and we have considered the draft agreement with Armenia. This document should be approved and signed shortly. Armenia would like to have this done in June. Overall, we all agreed. We expect that shortly after the Union is set up, Armenia will become its full-fledged member.
We also discussed the prospects for other partners joining the Union, primarily Kyrgyzstan. We have just had a detailed discussion with the President of Kyrgyzstan. I believe chances are high, though there is still a lot of work to be done to draft the relevant documents. We are ready to help, and Kyrgyzstan has every chance of joining the Union soon.
We agreed to step up our negotiations, as I already said, with Vietnam on creating a free trade zone, to strengthen cooperation with the People’s Republic of China, specifically in the exchange of customs information on goods and services, and to form expert groups that would work out preferential trade regimes with Israel and India.
I am convinced that through joint efforts we will be able to create favourable conditions for the development of our economies in order to maintain stability, security and prosperity in Eurasia.
Thank you for your attention.”
The statement on the Belarus President’s website is as follows:
“Alexander Lukashenko partakes in Supreme Eurasian Economic Council session in Astana
29 May 2014
President of Belarus Alexander Lukashenko takes part in the session of the Supreme Eurasian Economic Council, 29 May 2014
Belarus does not demand any concessions while promoting Eurasian integration. Belarus is an equal participant of this process alongside with Russia and Kazakhstan. Belarusian President Alexander Lukashenko made this statement at a session of the Supreme Eurasian Economic Council on the level of the heads of state in Astana on 29 May.
“We have been working on the Eurasian integration project for several years and the work was not easy. However, we have always kept in mind our major goal – to cement peace and accord between our nations, to make sure that the development of our countries is based on a solid foundation of mutually beneficial cooperation,” Alexander Lukashenko said.
“We have prepared for the signing of the Eurasian Economic Union Treaty. We have tried our best to promote our interests; we respect the position of our partners; we have carefully analyzed the documents and have acknowledged its strong points,” the Belarusian head of state stressed.
Leaders of Belarus, Kazakhstan and Russia held a session in the narrow format; then met with presidents of Armenia and Kyrgyzstan, members of delegations.”