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1 1 (February 22, 2018)

handle is hein.crs/govcczs0001 and id is 1 raw text is: FF. ' riES- - $rh ,i , mppm qq\ p\w -- , gn'a', go I aS 11LIANJILiN, Updated February 22, 2018 Eurasian Economic Union Figure I. EAEU Member Countries Source: Graphic by Hannah Fischer at CRS. The Eurasian Economic Union (EAEU) integrates several post-Soviet states into an economic union. Established in 2015, the EAEU includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, and the Russian Federation (Russia). The EAEU largely was a Russian-backed initiative, and it grew out of previous regional integration efforts, including the Commonwealth of Independent States, the Eurasian Economic Community, and the Single Economic Space. Perhaps the most significant precursor to the EAEU was the Customs Union (CU). Established in 2010, it included Russia, Belarus, and Kazakhstan. It led to a common external tariff (CET), tied to Russia's own tariff rates, as well as plans to develop a common customs policy. The EAEU emerged from the CU in 2015, but with two additional members: Armenia and Kyrgyzstan. The EAEU eases cross border trade and labor migration, and aims to eliminate non-tariff trade barriers among member states. Like the CU, the EAEU has a CET and, as of the start of 2018, a common customs code. The rates are relatively high, but the CET was expected to decrease on average from about 10.9% in 2012 to 7.9% in 2020, in part because of Russia's accession to the World Trade Organization (WTO). In addition, Kazakhstan, Armenia, and Kyrgyzstan have received a number of temporary exemptions to the CET related to their own WTO membership commitments. The EAEU is governed by several institutions. The Supreme Council comprises heads of state, including Russian President Vladimir Putin. The Inter-governmental Council convenes prime ministers, and the two-tiered Eurasian Economic Commission is the organization's day- to-day decision making body. An EAEU court is tasked with managing disputes, but its mandate is limited. Two other institutions, the Eurasian Development Bank and the Eurasian Fund for Stabilization and Development, support the EAEU's integration efforts through regional lending and investment programs. ...... o . \u,-. G.opofitia,?V The EAEU boasts a combined GDP of $1.5 trillion and represents a market of 180 million consumers. Initially, the Union achieved some important milestones by reaching a provisional agreement on common border regulations and establishing a CET regime. At the same time, the bloc has faced challenges advancing many of its critical goals, such as the development of a shared energy market. Some observers suggest the Union's issues are common to all trade blocs. Other analysts argue the EAEU's challenges are related to the Union's political dynamics, especially Russia's outsized role in determining the organization's direction. For example, in 2016, Russia imposed trade restrictions on Ukraine without the consent of its EAEU partners. Such unilateral actions made evident the power imbalance within the EAEU. The three largest EAEU members (Russia, Kazakhstan, and Belarus) negotiated the EAEU and its predecessor treaties over the course of the 1990s and 2000s. Armenia agreed to join the CU and eventually the EAEU in 2013; Kyrgyzstan signed an accession agreement in 2014. Moldova became the first Observer member of the EAEU in April 2017. Tajikistan is also considering membership. An EAEU Free Trade Agreement (FTA) with Vietnam entered into force in 2016. Several other countries, including China, India, Iran, Mongolia, Singapore, and Turkey, have expressed interest in establishing FTAs with the EAEU. Probably the most significant of these would be an EAEU-China FTA, which could enable Chinese goods to transit duty-free across Eurasia to the borders of the EU. An agreement could also lead to even greater Chinese investment in Eurasian logistics and infrastructure. Russia is the dominant member of the EAEU. It has around 75% of its total population and over 85% of its total GDP. However, only 5% of Russia's total trade is with EAEU member states. According to observers, Russia pushed for the creation of the EAEU to entrench its influence in neighboring states and to increase its international standing. Russia was-and still is-mindful of EU influence and its possible expansion into Eastern Europe, as well as China's increasing influence in Central Asia. In recent years, Russia has tried to give the EAEU a more political, and not just economic, character, but other countries-especially Kazakhstan-have resisted. .O 'T

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