About the project of order of Eurasian Intergovernmental Council “About the condition of mutual trad
Name and Surname: Anel Sovetkhan
Date: January 26
Word count: 491
Research Task One: Primary Legislative Acts
Document:
Act: Decision №9
Institution: Eurasian Economic Commission
Title: About the project of order of Eurasian Intergovernmental Council “About the condition of mutual trade between member states of Eurasian Economic Union in 2015-2016 years”.
Commentary:
In March 3, 2017 Council of Eurasian Economic Commission decided to approve the order №1 of Eurasian Intergovernmental Council “About the condition of mutual trade between member-states of Eurasian Economic Union in 2015-2016 years”.
The order was created with an aim of showing the importance of mutual trade for the domestic economies of single states and improving the mutual trade condition of the Union that has been worsened since 2013. Oil price fall, slow economic growth of world economy, unfavorable macroeconomic situation of each member state and devaluation processes are stated as the major factors that contributed to negative economic changes of the EEU (4-6). However, at this point it is important to note that major finding that might be derived after the thorough analysis of the data presented in this act is that economy of the whole Union is largely predominated by the Russian Federation. There are many evidences that support this statement. First, it is shown that according to the 2016 data Russia was the only state with positive balance of trade among all members, which means that its exports exceeded imports (11). In addition, it is the major exporter to the common market, accounting for 62.4% of the whole export and it is a main trade partner of each and all member states (10, 26). It is also significant to point the fact that almost 75% of all payments were done in Russian ruble; besides Russia, states like Kazakhstan and Belarus made major part of their transactions in Russian ruble too, 75% and 85% respectively (7). The graph of change in national currency rates and volume of mutual trade demonstrates that trade dynamics in EEU changes in accordance with the change in the rates of Russian ruble, placing the Russian ruble as the international currency in EEU (6). Based on all this information it might be argued that economic condition and the dynamics of mutual trade within the Union primarily depends on the economic decisions of Russia rather than the other factors.
Final section of the document presents analysis of measures for development of integration processes and widening the boarders of mutual trade within the Union. One of the main measures that is proposed by commission is to provide macroeconomic stability for single member states, by controlling the debts, budget deficits of government sectors and rate of inflation within each state (38). It is stated in the document that macroeconomic stability is the main force for increasing the trade interactions within the EEU as well as boosting the economies of each state (ibid). On the other hand, it can also be argued that behind the stated aims, the political incentives for implementing such measures might also have played significant role, since this type of measures are favorable condition for acquiring the power and creating the legitimacy of the Union by directly involving to the economies of each member state and creating some degree of dependency to the EEU.