A meeting of the Supreme Eurasian Economic Council took place in Moscow on December 24 with the participation of Russian President Vladimir Putin, President of Belarus Alexander Lukashenko and President of Kazakhstan Nursultan Nazarbayev. After the meeting of the heads of states which make up the integration nucleus, the counterparts from Armenia and Kyrgyzstan, as well as Ukrainian Prime Minister Azarov, who was there as an observer, joined the talks. According to Putin, new achievements on the way of boosting the integration process have been reached in the two months passed since the recent meeting in Minsk. The final pieces of draft treaty on the establishment of the Eurasian Economic Union were in place defining the international legal status, organizational framework, goals and mechanisms of functioning and the basic principles of the Eurasian project.

The project should fully meet the national interests of the participants taking into consideration special conditions some of them face (for instance, Armenia, which has no common border with the Customs Union, has introduced lower import duties for some commodities). It is planned to prepare a list of the remaining extractions and limitations still effective inside the Customs Union and the Common Economic Space by March 2014 and define the time schedule to do away with them, as the Russian President said. The meeting’s agenda included summing up the results of integration process in 2013 and defining the priorities for future in view 2014 is the year of preparation for launching the Eurasian Economic Union. The new Union is to organically link the existing integration structures – the Customs Union and the Common Economic Space. The Customs Union’s foreign trade priority is working out a concerted policy on goods coming from third countries. The Common Space is focused on creating conditions to foster the economic development and living standards of member-states. The preference is given to free flow of goods, services, capitals and labor crossing the state boundaries. Let’s note that Brussels actively imposes on its «Eastern partners» the same kind of projects. In his time former head of the European Commission Romano Prodi explained the gist of it using the example of the largest after Russia former Soviet Republic. According to him, the European Union needs Ukraine as a source of economic growth and economic security. Its human and technical potential, as well as land riches, could facilitate the transformation of Europe into a global center. Eurasian integration projects envision joint development. The involvement of Armenia and Kyrgyzstan into the process was a notable event of the outgoing year. A roadmap for Erevan is approved on December 24. At the beginning of December the South Caucasian Republic received discounts for the most crucially needed commodities it imports from Russia, for instance: gas, oil products and diamonds. According to preliminary estimates of the Eurasian Development Bank, the Armenia’s entry into the Customs Union will add 4 – 4, 5 percent to the annual GDP growth during two years. No matter there are still some things left to be agreed on, the restoration of production links within the framework of the space, which had been common and then was artificially fragmented, would give a new lease on life to the branches of economy which specialize on manufacturing final products with high added value. 

The accords between Russia and Ukraine reached on December 17 pave the way for closer interaction between Kiev and the emerging Eurasian Economic Union enabling Ukraine to revive a number of high-tech branches of economy. For instance, building ships of different types, including those designed for the Arctic operations. «The Russian Federation is beginning to develop its Arctic coast, and they have ordered gas tankers from us, which will be produced at shipbuilding enterprises in Nikolaev», said Ukrainian Deputy Prime Minister Yuri Boiko. The implementation of joint efforts in the field of space research is planned on the basis of Dnepropetrovsk space facility and Russian Korolev Design Office. The parties plan to join together and do a job which requires time and effort – to build a heavy rocket to lift around 90 tons of cargo into space. Russia and Ukraine plan to jointly build 80 An-124 aircraft allocating $ 12, 9 for the purpose. According to the estimates of the Eurasian Development Bank, the $1000 growth in Russian air industry entails the $ 45 growth of Ukrainian export to Russia guaranteeing the $119 production increase. Accordingly, the Russian airspace industry $1 billion production growth is followed by $119 production increase in Ukraine. It is assumed that this trend applies to other branches of economy. The perfection of bilateral customs policy is beneficial for the both sides. For instance, Russia may open its market for Ukrainian pipes while the other party to the fraternal relationship paves the way for supplies of Russian coal. Ukraine will also rescind special duties for the cars imported from Russia. 

President Putin speaks about the need for closer military and political cooperation. The comprehensive progress requires interstate contacts to discuss a wide range of issues to boost interaction. On December 25 Russia and Belarus held an important meeting of their Supreme State Council after which President Putin reported the decision to grant Minsk additional $2 billion. The pattern of Russia-Belarus integration in some fields is attractive for other post-Soviet states, including Ukraine. The energy security is an example, the construction of nuclear power plant in Belarus will probably make it the largest European energy supplier; the most favored nation status guarantees jobs for a large sector of Belarusian economy, including the high-tech manufacturing, it puts the nation into a better position before starting trade talks with other countries, like China, for instance. The creation of joint air defense, joint efforts to fight drug trafficking and terrorism, counter illegal migration and financial schemes and search for stolen cars – they are all matters of great importance. 

The Belarusian experience is appreciated by Kazakhstan. Vladimir Putin and Nursultan Nazarbayev signed a defense cooperation agreement, a road map for using Baikonur cosmodrome jointly in the following three years. An interstate agreement is concluded on supplying Russia oil to Kazakhstan and its transit to China. The parties will go on working out some documents, including coordinated rules of competition, common customs policy and control of monopolies. On December 10 the respective Russian government’s commission approved the creation of Eurasian Economic Community common insurance market.

All these facts confirm the need for coordinated, if not common, economic and tax policy. The revival of common cultural and information space presupposes humanitarian cooperation; otherwise it’s impossible to work out common social and educational standards, something crucial for formation of a common labor market. 

The signing of the Eurasian Economic Union treaty is slated for May 2014 to launch the project in January 2015. The creation of a powerful industrial and financial base will allow to compete and make the Union one of world economy leaders. The achievement of this strategic objective is the main mission of the Eurasian Economic Space for the coming future…