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Decision No.1 On the Concept of the establishment of a new Eurasian Machine Tool Engineering Center

Name and Surname: Aigerim Aibassova

Date: 26 January 2018

Word count: 449 (including citations)

Research Task One: Primary Legislative Acts

  • Document:

  • Act: Decision No. 1 of the Eurasian Intergovernmental Council dated April 13, 2016

  • Institution: Eurasian Intergovernmental Council

  • Title: On the Concept of the establishment of a new Eurasian Machine Tool Engineering Center

  • Commentary:

Decision No. 1 of the Eurasian Intergovernmental Council discusses the mechanisms and goals of creation of the Eurasian Machine Tool Engineering Center. The following reasons are presented for the establishment of the Engineering Center: depreciation of equipment in member-countries’ industry sectors; delayed technological development; low competitiveness on the international market of machine tools and technology; high level of essential equipment import. Thus, the Engineering Center is designed to solve these issues by integrating new technological models into industrial complexes of member-states, long-term analysis of machine engineering field, adoption of new technology from non-member countries, creation of a single electronic bank of new technology accounts, localization of production, etc.

The document also covers the importance of the Concept, emphasizing the state of machine tools production in the Eurasian Economic Union (EAEU) in status quo. As the Decision states, EAEU countries account only for 1% of the world technological tools market and only 1.35 of the Union’s GDP is directed towards innovation and technology. As mentioned, member-states also resort to importing machine tools for their industries, e.g. according to Euromonitor International, Russian machine tools are 79% imported (the U.S. Department of Commerce, 2017). The above mentioned facts become especially significant considering how heavily the GDP of member-states rely on the industrial and agricultural sectors, which are the main consumers of machine tools. According to the Central Intelligence Agency (2014), industrial and agricultural sectors respectively amount for 34.4% and 4.8% of Kazakhstan’s GDP, 32.4% and 4.2% of Russia’s, and 40.6% and 9.2% of Belarus’, 37.3% and 20.6% of Armenia’s, and 34.4% and 20.8% of Kyrgyzstan’s. Thus, if the Engineering Center succeeds in alleviating this problem, it would be a great boost for the member-states’ economy. The Center could do it by two means.

First, in long-term it could increase the amount and quality of domestically made machine tools. According to the Decision, the Engineering Center serves as an organizing institution, which manages various tasks, including checking whether imported tools have analogues produced by member-states, systematic adoption of third party production technology, and localization of production in long-term. It is unclear whether the EAEU would be spending its own budget on the Engineering Center, yet the document states that member-states should fully exploit their scientific and technological potentials to ensure the work of the Center.

Second, the Engineering Center further integrates the machine tools sector of the member-states. Several methods of integration include cooperation on new projects, usage of common electronic accounts, sharing of production method and technology. This ensures a faster mutual flow of technological and scientific knowledge across the EAEU, which again boosts the engineering capacities of member-states.





Reference List

Central Intelligence Agency. (2014). Armenia. In The world factbook. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/am.html

Central Intelligence Agency. (2014). Belarus. In The world factbook. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/bo.html

Central Intelligence Agency. (2014). Kazakhstan. In The world factbook. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/kz.html

Central Intelligence Agency. (2014). Kyrgyzstan. In The world factbook. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/kg.html

Central Intelligence Agency. (2014). Russia. In The world factbook. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/rs.html

On the Concept of the establishment of a new Eurasian Machine Tool Engineering Center (Eurasian Intergovernmental Council, 2016). Retrieved from https://docs.eaeunion.org/docs/en-us/01410056/icd_15042016_1

U.S. Department of Commerce. (2017). Russia - Machine Tools. Retrieved from https://www.export.gov/article?id=Russia-machine-tools

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