NEW LAW ON COAL AND STEEL CREATED

Work on the agreement on the establishment of the Eurasian Economic Union (EAEU) was launched in late 2011 when the presidents of Russia, Kazakhstan and Belarus adopted a declaration on Eurasian economic integration. After almost three years, Vladimir Putin, Nursultan Nazarbayev and Aleksandr Lukashenko signed a 900-page treaty, announcing the creation of the second largest geo-economic entity in the world after the European Union (EU).

The parliaments of the signatory countries are encouraged to ratify the document before the end of this year in order for the EAEU to begin to function from 1 January 2015. The parties agreed to provide conditions for the free movement of goods, services, capital and labour between the member states. In addition, they will implement a coordinated policy in key sectors - energy, industry, agriculture and transport.

Thorny path to union

The signing of the treaty was not easy for the parties. In an effort not to damage their sovereignty, Kazakhstan and Belarus insisted that the document emphasizes the purely economic nature of the EAEU.

Thus, the treaty confirmed the principle of decision-making by consensus. And because of this a lot of what was offered at the beginning never appeared in the document. "We went away from politicizing the treaty and, therefore, the Union, the whole backbone is purely economic cooperation. Due to the consistent position of Kazakhstan, such issues as common citizenship, foreign policy, inter-parliamentary cooperation, passport and visa sphere, common border protection, export control and others were excluded from the treaty," Kazakh Deputy Foreign Minister Samit Ordabayev said.

In any case, the three post-Soviet countries established a new alliance that claims the status of a world power. At this stage, the EAEU unites more than 170 million people. This area, as explained by the president of Russia, contains a fifth of gas and 15 per cent of global oil reserves. Two other countries - Kyrgyzstan and Armenia - wish to join this union soon.

Kyrgyzstan hopes to join the EAEU by the end of 2014, President Almazbek Atambayev said. According to him, the Kyrgyz parliament will have to adopt 30 laws and ratify a number of documents so that Kyrgyzstan can meet the New Year as a member of the EAEU.

Armenian leader Serzh Sargsyan offered to sign the agreement on his country's entry into the EAEU before 15 June this year. Russian President Vladimir Putin also wished to sign the agreement with Yerevan as soon as possible.

Armenian burden

Theoretically, the membership of Armenia, which has no common borders with the EAEU countries, contradicts the originally stated criteria. Although participants in the project were not going to reproach Armenia for this problem, they failed to ignore the aggressive policy of Yerevan towards its neighbours.

Though Baku is neither a party nor a candidate for membership in the new entity, it demanded that the partners in the region make a reservation on the accession of Armenia to the EAEU.

"We have received a letter from the president of Azerbaijan that Armenia joined the WTO with the proviso that the provisions should be extended to the territory of Armenia within the framework of its international borders recognized by the UN. This is for discussion," the president of Kazakhstan said.

He suggested that the treaty on the accession of Armenia to the EAEU should include a point that the country is doing so within the state borders recognized by the UN.

Nazarbayev addressed Serzh Sargsyan: "You joined the WTO this way." "Let's discuss it in June," he suggested.

Nazarbayev's words, as expected, caused "outrage" in Yerevan. The LRAGIR portal writes that Nazarbayev "put forward a monstrous ultimatum to Armenia" and adds that Yerevan "was actually given 15 days to surrender Karabakh".

However, Yerevan should have realized that attempts to drag occupied Nagornyy Karabakh into the EAEU as part of Armenia were doomed to failure. That is to say none of the customs, immigration or other privileges that will apply to Armenia as a member of the EAEU can be extended to the occupied territories of Azerbaijan. And Armenia itself calls these territories "the independent Nagornyy Karabakh Republic". A "republic" with this name has not submitted a request to join the EAEU.

This fact was another signal to Yerevan that the continuation of the war with Azerbaijan is not in the interests of Armenia. Nazarbayev's statement was yet another confirmation of the words of Azerbaijani President Ilham Aliyev that it is impossible to implement any regional project today without considering the opinion of Baku.

A long way to go to the EU, but...

With or without Armenia, the establishment of the EAEU can be considered a fait accompli. And although the founding countries are talking about the exclusively economic focus of the new union, most analysts also see a political future behind this project. At least this is proved by the desire to include all CSTO member states in the union in the initial stage. That is to say along with the economic component, there is already a military component in cooperation. And Belarusian President Aleksandr Lukashenko did not hide that he sees the EAEU as a framework for political, military and humanitarian unity.

Many analysts already liken the EAEU to the European Coal and Steel Community, which was established after World War II and was followed by the European Economic Community that laid the foundation of the current European Union.

Other experts show cautious optimism. In their opinion, the new entity in the post-Soviet area has a long way to go to the level of the European Union. Whatever Moscow says, the EAEU treaty once again reinforces the Russian sphere of influence. And this is the fundamental difference between Eurasian and European integration. Proponents of this view believe that the EU has no state which claims to be dominant despite the fact that Germany is the economic powerhouse of the EU.

On the other hand, member states of the EAEU are not yet ready to create supranational institutions and form a unified financial and currency area and other elements necessary for integration at the EU level.

Nevertheless, it was probably this prospect that caused an extremely zealous attitude in the West towards the Russian-sponsored new integration project. The US and Europe are sure that in fact Russia is trying to prevent the pro-Western aspirations of some post-Soviet states in order to preserve and strengthen its influence in the region. It is no accident that immediately after the idea of the Eurasian economic area that took concrete shape in the form of the Customs Union, the EU expedited the process of rapprochement with partners from the former Soviet Union as part of its Eastern Partnership programme. And one of the main conditions for the signing of the Association Agreement with the EU was not joining the Customs Union with Russia.

However, at the very last moment, Armenia, under the influence of Russia, refused to sign the agreement with the EU while Ukraine led by Viktor Yanukovych decided to postpone work on it indefinitely. But if there were no great expectations from Armenia, the West clearly had no intention of losing Ukraine. It is this dissonance that seems to have echoed on the Kiev Maidan, subsequently triggering events that had dire consequences for Ukraine.

3-1 in favour of Moscow

Perhaps, it was the Ukrainian events that forced Russia to accelerate the creation of the EAEU. That is to say Moscow had to demonstrate its geopolitical influence and the annexation of Crimea was not enough in itself. The recent agreement with China on purchases of Russian gas gave the Kremlin another point. And the creation of the EAEU will give Russia one more point in its confrontation with the West.

The main office of the EAEU will be in Moscow, the court in Minsk, and the financial centre in Astana. The union promises not to compete with the World Trade Organization (WTO) and even act by its rules without reinventing the wheel. In any case, the newly-formed entity has a long way to go to competition with the WTO. For a successful start it will be enough to deal with the unresolved issues of its predecessor - the Customs Union. And then time will tell.