Eurasian Economic Union Trade Up 38%
The Supreme Eurasian Economic Council, the Governing body of the Eurasian Economic Union met in Bishkek on Friday, with Russian President Vladimir Putin stating that mutual trade volume of the EAEU states had increased 38% YoY, while exports from the EAEU were up 37%.
He stated “I should note that the cooperation within the EAEU is successfully developing as together we’ve achieved certain results in the formation and strengthening of the large common market with general rules for economic operators. The EAEU common market has worked as a safety cushion despite the costs related to the global unfavorable environment, and the economies of the EAEU member-states have managed to adjust to new realities. What I think is most important is that the structure of export-import operations has substantially improved, and the share of commodities in 2016 trade dropped while the share of cars, transport vehicles, as well as food and agriculture producers rose.”
Related Reading: China Lays Foundations for Eurasian Free Trade
The EAEU comprises Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia, and has just approved Moldova’s application for observer status. Although its geographic and political make up are not in line with current European sensitivities, it nonetheless produces an annual GDP of some USD4.2 trillion, and has an average per capita income of USD13,151 in purchasing power parity terms, which is higher than China. For this reason, the EAEU is attracting intense interest from other countries, especially in Central and East Asia. China and India have both commenced negotiations for Free Trade Agreements, as have Iran and Singapore. Vietnam already has an FTA with the EAEU, under which Vietnam removed import tariffs on 59% of goods imported from the EAEU, including products such as meat, wheat flour, alcohol, mechanical equipment and steel. Tariffs on another 30% of goods will be gradually reduced to zero in a transitional period. The EAEU-Vietnam FTA was signed on May 29, 2015 after eight rounds of negotiations. Foreign investors that are part of the EAEU countries could take advantage of the upcoming FTA to further their businesses in Vietnam, and Dezan Shira & Associates Vietnam offices report that this has already been the case.
According to the EAEU, 2016 saw a near 4% increase in its agricultural production, and growth was also reported in the industrial sectors. Putin further stated “We expect these sectors to show positive results in 2017 as well. EAEU partners are increasingly tapping the Russian market, which is beneficial for all parties. One of the key tasks is to consistently lift barriers hindering the free float of goods, workforce, services and capital. EAEU countries still face this challenge, though it has been decided that they will be gradually lifted in accordance with the Agreement on the Union until 2025.”
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