The Eurasian Economic Union (EAEU) Board Chairman, Tigran Sarkisyan, has said the EAEU is working on free trade zone (FTZ) agreements with China, Iran, India, Israel, and Singapore, with another 40 countries currently interested in establishing trade and economic relations.
The Russia backed Eurasian Economic Union, a Free Trade bloc that includes Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan, has been generating a huge amount of interest due to its Silk Road coverage, Moscow’s regional political clout and China’s One Belt, One Road scheme. With just these members alone, the EAEU has a GDP of USD2.2 trillion.
“The first priority group for us is certainly China, the interface program of the Eurasian integration and the Silk Road Economic Belt. Iran is the second area. The third one comprises Egypt, India, Israel, Serbia, and Singapore,” Sarkisyan commented in the media this week.
China’s resurgent interest in opening up the region is making the EAEU an increasingly important trade bloc and one that is rapidly expanding its influence in Asia. Vietnam signed off an FTA last year, while China and India have both commenced negotiations. This adds significant clout to the importance of the EAEU, and fits in with Russia’s need to turn its trade attention east in the face of European sanctions. In addition to China and India, we can update on the following nations negotiating Free Trade Agreements with the EAEU:
Talks about Egypt having an FTA with the EAEU have been approved, with draft documents currently being prepared.
With the appointment of a new Finnish Ambassador, EAEU FTA talks are also are expected to commence shortly. Finland is in a unique European position with Russia given its long, 1,340km border.
Talks are expected to commence shortly following the appointment of a new Dutch Ambassador to Moscow in December.
The President of Iran and the Russian President have stated “it is necessary to commence discussions on Free Trade between Iran and the EAEU”. The EAEU approved the commencement of these talks in December 2016.
Russia’s Prime Minister Dmitry Medvedev and his Israeli counterpart Benjamin Netanyahu have both stated that “signing an agreement on a free trade zone between Israel and the Eurasian Economic Union would bring trade turnover, investments, and technological exchange between the countries to a new level”. Negotiations are underway and continuing.
President Putin has stated that he hopes “FTA talks with New Zealand will resume” following the approval of the New Zealand Ambassador in Moscow in December 2016.
Russian First Deputy Prime Minister Igor Shuvalov has previously stated that the EAEU and Singapore may sign a free trade agreement by the end of 2017 and ratify it in the first half of 2018. Shuvalov described Singapore as one of Russia’s key partners in ASEAN. “This timeline is harsh, but it is possible. We, on our part, will try to complete this work”, he said. Singapore’s Deputy Prime Minister, Tharman Shanmugaratnam, also confirmed his country’s interest in economic and trade cooperation with Russia.
There are strong political indications that several EU nations are unhappy with EU sanctions having been imposed upon Russia. The recent flurry of ambassadorial appointments from several EU nations to Moscow may be the start of renewed trade activity, especially as the EAEU is not a specific part of the sanctions targets. In Asia, several ASEAN nations have expressed interest in having an FTA with the EAEU, and have a case study with ASEAN member state Vietnam already having signed off an agreement. Singapore especially is keen to see its own bilateral FTA in place with the EAEU.
Also considering the commencement of talk are Burundi, Columbia, Iceland and Turkmenistan. The big prize still at hand, however, remains the intention of both China and India to agree FTA with the EAEU. This won’t be a fast procedure, China, India and Russia are large economies and a lot needs to be worked out as concerns impact. However, with the process underway and with other nations getting on board, the EAEU looks like an idea whose time will very shortly be coming to fruition.