Shanghai Cooperation Organization and the Eurasian Economic Union. The EEU and the SCO are preparing an agreement on continental partnership. How does Russia generally assess China’s recently adopted “One Belt, One Road” policy? Is it compatible with Eurasian

The Eurasian Economic Union (EAEU) and the Shanghai Cooperation Organization (SCO) will work to prepare an agreement on economic continental partnership. This was announced by First Deputy Head of the Ministry of Economic Development of the Russian Federation Alexey Likhachev. The agreement will provide for the freedom of movement of goods, promotion of trade turnover and freedom of movement of capital. Some analysts see a lot of positive things in the likely future merger. Others are full of skepticism.

The EAEU and the SCO will begin work on preparing an agreement on economic continental partnership, said First Deputy Head of the Ministry of Economic Development of the Russian Federation Alexei Likhachev, speaking at the first Russian-Chinese construction forum in Moscow.

“In December 2015, at the council of SCO heads, an idea was voiced from our Kazakh partners to seriously think about the SCO free trade zone,” he is quoted as saying. “We didn’t just accept together with the Chinese delegation, we developed this idea to the following: in fact, we will now prepare approaches to some kind of economic continental partnership, to a comprehensive agreement within the SCO.”

He outlined the promising “borders” of the SCO: “And we understand that today the SCO outlines countries such as China and Russia, the countries of Central Asia, but also involves in this work, on the one hand, Armenia and Belarus, which are members of the EAEU, on the other parties, India and Pakistan, who have begun a difficult, but, I think, successful path to joining the Shanghai Organization in the future. So, just think about it, about half the world's population will be part of this huge agreement."

According to Likhachev, the agreement includes the following components: freedom of movement of goods, freedom of movement of capital and investment, a comfortable environment for increasing the share of payments in national currencies, preferential access to service markets, in particular to construction.

A discussion of the outlines of the future agreement is scheduled for March 17 at a meeting of ministers of economics and trade in Moscow.

Work on preparing the agreement will be carried out within the framework of the Eurasian Union and within the framework of bilateral contacts between the PRC and Russia. “I would like to emphasize that this task has been reported to our leaders - the Chairman of the People's Republic of China, the President of the Russian Federation. I think that the final point at the beginning of these negotiations, in the creation of this, perhaps the most ambitious trade agreement in the world, will be set at the meeting of the heads of state of the Shanghai Cooperation Organization,” Likhachev quotes.

Likhachev later told reporters, the agency notes, that by the next meeting of the SCO heads of government, the economic ministers should propose a “road map” for preparing an agreement.

He quotes his words spoken to journalists on the sidelines of the forum: “We invite all SCO economic ministers to Alexey Valentinovich Ulyukaev on March 17 to discuss the substantives of this agreement.”

What do Russian experts think about this?

Director of the Center for East Asian and SCO Studies at MGIMO Alexander Lukin is full of skepticism.

“I perceive the current statement of Alexei Likhachev as quite bold,” he said. - The Shanghai Cooperation Organization consists of many countries. Even Russia is currently finding it difficult to have a free trade zone with China. For Tajikistan and Kyrgyzstan, the creation of a free trade zone will mean the elimination of the remnants of any production. Will countries agree to this? Kyrgyzstan, for example, is a member of the WTO, but there are heated discussions on this issue within the country.”

The expert strongly doubts that “a free trade zone will be formed in the near future.”

On the contrary, the idea of ​​future integration is approved by the head of the department of world economics at the Diplomatic Academy of the Russian Foreign Ministry, Vladimir Mantusov.

“The idea of ​​integrating the SCO and the EAEU is clear to me and seems attractive,” he told a SP correspondent. - What will happen in practice? We need to look at specific agreements. Maybe this will be the first stage of international economic integration, that is, a free trade zone. Maybe it will even be a customs union, which will develop into an economic union.”

According to the expert, the two associations are thinking about formalizing their economic relations, which de facto already exist, and this is good. “Almost half of the members of one association are also members of another,” the scientist explained. - Let's say, Belarus is part of the EAEU, but it is not in the SCO, but Russia and Kyrgyzstan are part of two structures. The very idea of ​​integration is correct.”

The expert explained the likely benefit for the parties to the agreement using an example: “Suppose there are agricultural products that are expensive to produce. Theoretically, it is possible to grow oranges and bananas in Russia, but this is not practical. But we have products that are needed in China. The PRC produces goods that we and Belarusians do not have. And the need for products in a particular country determines the preferential trade regime for supplies from abroad to the domestic market.”

Alexander Lukin is much more categorical and sees no reason for optimism: “There may be limited agreements, but this is not a free trade zone. We don't know what will happen in 20 and 30 years. But now there will be no free trade zone.”

The idea of ​​economic partnership (integration) between the EEAS and the SCO, we would add, has actually been voiced before.

On February 11, the Kazakh news portal published a statement by the Chairman of the Supreme Eurasian Economic Council, Nursultan Nazarbayev, with which he addressed the heads of the EAEU member countries.

According to him, the EAEU is organically integrated into the global economic system as a reliable bridge between Asia and Europe. The current year, according to the head of Kazakhstan, should mark the beginning of work on the formation in the future of a free trade zone for the EAEU and SCO states.

Nazarbayev also proposed declaring 2016 a year of deepening economic relations of the EAEU with third countries and major integration associations.

On February 18, an article by Marat Yelemesov appeared on the website of a Kazakh socio-political newspaper under the heading “Kazakhstan proposes to create a free trade zone between the SCO and the EAEU.”

The journalist asked experts to evaluate Nazarbayev’s proposal to create a free trade zone between the SCO and the EAEU.

Director for International Projects at the Institute of National Strategy, Yuri Solozobov, recalled the turning point in the global economy: “The fact is that today the global economy is experiencing a turning point. The United States and the EU are preparing to sign an agreement on the Transatlantic Trade and Investment Partnership (TTIP), which will create a common market of goods and services of 800 million people. Recently, 11 Pacific Rim countries and the United States, representing 40% of global GDP, signed the Trans-Pacific Partnership (TPP). These two major agreements, TTIP and TPP, have the potential to destroy WTO norms. They can impose their own, obviously unfavorable rules of the game on participants in the global economy. Washington is the locomotive of these “maritime” integration projects, which can lead to the tearing of Eurasia into two parts. There is an urgent need for a new integration program for the continental countries of Eurasia, which would take into account the interests of China, Russia, Kazakhstan, Iran and India as the main world players of the 21st century. Together, these countries already account for almost a third of the world economy in purchasing power parity terms and their importance in global affairs will only grow.”

Associate Professor of the Department of Financial Markets and Financial Engineering at RANEPA Sergei Khestanov told the correspondent that the economies of the EAEU member countries are noticeably slowing down. The PRC economy is also slowing down, but its growth rate remains significant (+6.9%). This means that strategic cooperation with the SCO looks promising. Yes, the FTA between the EAEU and the SCO carries the risk of increased competition with Chinese producers, but it also provides the opportunity to enter the Chinese market. The expert believes that producers of raw materials and food will benefit from such a free trade zone FTA. In addition, the FTA will clearly stimulate the arrival of Chinese investors, and this is also a plus.

Researcher at the Institute of Economics of the Russian Academy of Sciences Alexander Karavaev believes that the consolidation of the EAEU FTA is a necessary measure. This is one of the possibilities for maintaining an integration association during a crisis.

Thus, expert opinions differ on the possible integration of the EAEU and the SCO and the creation of a free trade zone. Some believe that the consolidation of associations is forced in a crisis, and do not believe in an FTA at all; others welcome integration and believe that preferential trade treatment and the diversity of participating countries' economies will lead to positive cooperation results.

The emergence of the Silk Road Economic Belt project has caused a lot of controversy about whether Russia and China will be able to harmonize their integration and infrastructure projects in Central Asia. About how Chinese initiatives relate to Russian policy in the region, to a correspondent of a Chinese magazineInternationalHeraldLeadertold acting Director of the Institute of Far Eastern Studies of the Russian Academy of Sciences, RIAC expert Sergei Luzyanin.

How does Russia generally assess China’s recently adopted “One Belt, One Road” policy? Is it compatible with the Eurasian Union, which Russian President Vladimir Putin is striving to create?

It is obvious that, in addition to possible risks, the creation of the Silk Road Economic Belt will serve as a constructive economic incentive for Russia. In particular, there will be a need to implement active investment, trade and economic policies for the participating groups, including, in particular, the expansion of railway and highway construction - examples of such activities are the reconstruction of the Moscow-Kazan railway line and the construction of a high-speed railway between Moscow and Beijing. In the future, as Beijing plans, the unified transport network will create a transport corridor connecting the Asia-Pacific region with the countries of Western Europe. Such a network would link 18 Asian and European countries, covering a total of 50 million square kilometers with a population of 3 billion people. Over the past 10 years, the annual growth of China's trade with countries along the Belt has been about 19%, and China's trade turnover with these countries in 2014 reached more than 600 billion US dollars.

The idea of ​​the Belt, put forward by Chairman Xi Jinping, was initially perceived quite cautiously in Russia and a number of other countries of the Customs Union that existed at that time. A number of Russian experts even argued that this project represents the PRC’s reaction to the slow pace of development of the SCO and that the Silk Road is an alternative option for accelerating development for Central Asia and neighboring regions.

As has now become obvious, the situation is not so critical. Undoubtedly, Xi Jinping's project is extremely ambitious, designed for the long term and reflects the pace of growth of China's influence and the nature of this growth as a new economic power. In the context of the Great Silk Road project, China’s tasks in the Eurasian space are quite clearly visible. On the other hand, it is just as obvious that this project does not interfere and is not intended to interfere with the implementation of the other two plans - the development of the SCO, within which China and Russia continue to play a central role, and the Eurasian Economic Union. At the moment, Chinese projects (Economic Belt and Silk Road) seem to be an important strategic initiative of the country's leadership, which, however, has not received institutionalization.

Thus, in the context of these projects, Russia is not at all a passive observer from the point of view of the multilateral or bilateral format of cooperation with the PRC. While China is actively promoting its project, Russia - if we talk about the SCO format - is interested in finding (political and expert) ways and opportunities for developing interaction or rapprochement between the SCO and the Silk Road project. Russia's interest in developing interaction between the SCO both with the Eurasian Economic Union and with the Silk Road project is visible quite clearly. However, there are a number of options/scenarios that can be implemented in this process: ( a) development of integration/rapprochement along the “Northern Route” (SCO - EAEU) with the strengthening of the Eurasian Development Bank by attracting Chinese resources - or (b) along the “Southern Route” (SCO - Silk Road), which, however, seems to be more late in terms of possible periods and implementation possibilities. At the same time, the parallel development of all three projects cannot be ruled out.

How will Russia build its relations with the five Central Asian countries if they decide to cooperate with China within the framework of the “one belt, one road” concept?

The strategy chosen by China to implement the “one belt, one road” policy will not create a conflict of interests between Russia and China in Central Asia. Some Western experts believe that all Central Asian countries will join the Chinese Silk Road project and forget about Russia and its projects altogether. However, this is not the case: there is a close connection between China, Russia and the countries of Central Asia due to their membership in the Shanghai Cooperation Organization (SCO). The only state in Central Asia that is not a member of the SCO, Turkmenistan, does not play an important political role in the region. Thus, we see the possibility of multilateral cooperation within the framework of the Chinese Economic Belt and the SCO, their rapprochement, as well as the active participation of Central Asian countries in general cooperation in the field of economics and transport.

MOSCOW, March 2 – RIA Novosti. The countries of the Eurasian Economic Union (EAEU) and the Shanghai Cooperation Organization (SCO) will work on an agreement to create an economic continental partnership in the form of a free trade zone, said First Deputy Head of the Russian Ministry of Economic Development Alexey Likhachev.

“An important point for us is the decision of our prime ministers that has already been made to seriously think about the SCO free trade zone. We did not just accept it together with the Chinese delegation, we developed it to the following: in fact, we will now be preparing approaches to some kind of economic continental partnership, a comprehensive agreement in within the framework of the SCO. Moreover, we understand that today the SCO outlines countries such as China and Russia, the countries of Central Asia, but also involves in this work, on the one hand, Armenia and Belarus, which are members of the EAEU, on the other hand, India and Pakistan, which have begun a difficult, but, I think, successful path to joining the SCO in the future,” Likhachev said.

According to him, thus, about half of the world's population will be party to this huge agreement. “And there we see at least three major components: freedom of movement of goods, promotion of trade turnover, of course, issues of capital movement, investment, a comfortable environment for increasing the share in national currencies, and, of course, preferential access to our services market ", he added, speaking at the first Russian-Chinese construction forum.

Likhachev noted that although Russia already has similar experience in creating a free trade zone - with Vietnam - this project has a “completely different scale.”

“I would like to emphasize that the task has already been reported to our leaders - the Chairman of the People's Republic of China, the President of the Russian Federation. And I think that the final point at the beginning of these negotiations, in the creation of this, perhaps the most ambitious trade agreement in the world, will be set at the meeting of the heads of state of the SCO" ,” Likhachev summed up.

“We invite all SCO economic ministers to Alexei Valentinovich Ulyukaev on March 17 to discuss the substantives of this agreement,” he clarified to reporters on the sidelines of the forum.

According to the deputy head of the Ministry of Economic Development, the heads of the SCO countries gave a non-public instruction to the economic ministers to meet and at the next meeting of the Council of Heads of Government “to report a certain roadmap for the preparation of this agreement.”

How the EAEU was created

The Eurasian Economic Union (EAEU) is an economic union, which, as part of Eurasian integration, is being created on January 1, 2015 on the basis of the Customs Union of Russia, Kazakhstan and Belarus. Cooperation in the field of interstate integration in the economic sphere in the post-Soviet space has been ongoing since the late 1990s. On February 26, 1999, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan signed the Treaty on the Customs Union and Common Economic Space.

40% of the world's population lives in the countries that make up the Shanghai Cooperation Organization and the Eurasian Economic Union (EAEU). The two alliances are well positioned to create a new platform for economic cooperation. The integration of the EAEU and the SCO is beneficial, first of all, to the countries of Central Asia. This will help develop the economy and improve security. It's no secret: stability is the basis for successful economic cooperation. These two organizations, despite a number of contradictions, can successfully complement each other. Cooperation within the EAEU is focused primarily on issues of economic interaction. As for the SCO, while proclaiming its fundamental commandment - “strengthening security in the region, promoting the development of the potential of good neighborliness, unity and cooperation between states and their peoples”, it also declares the creation of mechanisms for economic cooperation. To assess the possibility of connecting two organizations, it is necessary to recall the goals and objectives of each of them. Participants in the first summit that created the Shanghai Five (Russia, China, Kazakhstan, Kyrgyzstan and Tajikistan) in 1996 signed an agreement to build military confidence in the field of border security. A year later, Uzbekistan joined the SCO, and the format of the organization became the “six”. Russia and the young sovereigns of Central Asia no longer posed a military threat to China. All Soviet military garrisons were withdrawn from the Central Asian region. But at the same time, the economic balance was disrupted, including the factor of deindustrialization, since many enterprises were “sharpened” to serve the Soviet military system. Having completed its task of ensuring stability along the perimeter of the borders of the former Soviet republics and China, the organization turned to the economic component. There were some contradictions: Beijing insisted on the creation of the SCO Development Bank, while Moscow proposed settling on the SCO Development Fund in order to provide financial support for joint projects within the organization. The conflict was that China has a large amount of cash, and the SCO Bank would automatically become a Chinese instrument. Russia insisted on maintaining balance within the SCO. Today, the SCO has entered a new phase of its institutional development as the “Shanghai Eight” - in the summer of this year. India and Pakistan became full members of the Organization. If we talk about the EAEU, then this is a project in which, at the level of all official documents, exclusively economic integration is laid down. In May 2014, the presidents of Russia, Kazakhstan and Belarus signed the EAEU agreement on the basis of the Customs Union. Later, Armenia and Kyrgyzstan joined the integration association. Next up is Tajikistan. The EAEU was conceived as a confederation of sovereign states with a single political, economic, military and customs space. In this case, of course, we are not talking about somehow influencing the political sovereignty of the organization’s member countries, their currency and tax regimes. The EAEU has clearly defined development paths as a subject of international law - this is the Free Trade Area (FTA). The direction is quite effective and efficient. The EAEU concludes FTA agreements with specific countries. Recently, the main parameters of the FTA were agreed upon with China. Indian delegations have repeatedly taken part in EAEU meetings. About 50 countries around the world are showing interest in the FTA. In fact, for cooperation within the EAEU-FTA, it is enough to have bilateral relations: EAEU-China, EAEU-India, etc. This is the best option because all participants have different economies and a different structure of export-import trade relations. But it is difficult to imagine an FTA agreement within the framework of the EAEU-SCO organizations, since the interests of the countries belonging to these organizations are different. And most importantly, the SCO does not have legal personality within the framework of international law, i.e. No one can sign agreements on behalf of the SCO, while the EAEU has such a right. However, China proposed creating a regional FTA on the SCO platform. To fully implement its plans, Beijing has proposed the concept of “One Belt, One Road” as part of its “Silk Road Economic Belt” strategy. In May 2017, a presentation of this project took place in Beijing, where issues of allocating investments for the construction of industrial enterprises, oil and gas and transport infrastructure, which will connect the PRC with the countries of the Central Asian region, the European Union and Africa, were discussed. China, in an effort to demonstrate the seriousness of its commitment, has guaranteed $124 billion in investment. Kyrgyzstan has secured China's consent to build a railway that will connect the railway systems of the two countries with access to Uzbekistan. The latter has concluded agreements with China for $23 billion. As part of the program, Tajikistan plans to increase trade turnover with China to $3 billion by 2020. Experts believe that by interacting with Central Asia through the SREB and SCO, China is building long-term partnerships with each country in the region separately due to unresolved intraregional problems. Beijing's consideration of such features is valued in the region and suits the parties. It is also expected that the search for specific mechanisms for linking the Silk Road Economic Belt initiative and the EAEU will be intensified. According to the head of the department of economic theory at IMEMO. E.M. Primakov RAS Sergei Afontsev, the development of a full-fledged interface between the Chinese initiative and the EAEU is hampered by several factors. The first is the interpretation of the BRI project as primarily an infrastructure project. Secondly, large projects with the participation of state companies at the level of interstate discussions are always in the foreground. These are projects that require billions of dollars in investments and decisions at the level of political leadership of countries. According to Afontsev, business circles are no less capable of identifying possible points of convergence. The potential for cooperation in the high-tech sphere remains unclaimed. “This is a real opportunity for the Russian side to ensure a solution to the priority task of increasing the share of non-resource products in exports, for the Chinese side to further expand its export potential through the production of fundamentally new goods, customized for specific markets of the EAEU and EAEU partner countries. According to the economist, this direction is especially promising in light of the opportunities that are currently opening up due to the fact that the EAEU is preparing a number of FTA agreements with third countries. The potential gain, according to expert Kubat Rakhimov, may be in building equal relations on the platform of the SCO Bank or the SCO Foundation. “The SCO Bank must be a multilateral investor. It would be interesting. Leveling the balance of geopolitical interests within the SCO due to the emergence of India and Pakistan,” Rakhimov believes. In his opinion, the SCO is gaining a new connection with the economic project of the EAEU.”

On May 17, 2018, during the economic forum in Astana, an agreement was signed between the People's Republic of China and the Eurasian Economic Union on economic and trade cooperation. This document, according to the Chinese side, is an important milestone in promoting the PRC’s “One Belt, One Road” initiative. The process of ratifying the treaty may drag on for many months, but China is in no hurry: cooperation with the EAEU is not the only way for Beijing to engage in trade and economic interaction with Eurasian states.

The volume of the agreement was 13 chapters. The document defines the activities of the PRC and the EAEU within the framework of customs cooperation and trade facilitation, intellectual property rights, establishes the basis for departmental cooperation and public procurement, and also establishes rules for conducting electronic commerce, and considers issues related to competition in markets.

The parties agreed to further simplify customs clearance procedures and reduce associated costs when conducting trade.

It is planned to create favorable conditions for industrial development, promote the deepening of economic relations between the PRC and the EAEU, as well as its member states within the framework of bilateral relations with the PRC.

The path to an agreement began in May 2015. Since then, five rounds of negotiations, three working group meetings, and two ministerial consultations have taken place. The agreement opens a new stage in relations between China and the EAEU, as well as cooperation within the framework of the EAEU alignment policy and the Belt and Road initiative.

China emphasizes that, despite the absence of tariff reductions under the agreement, it is based on WTO rules and regulations. This view allows us to talk about two aspects of the developing trade and economic interaction between China and the EAEU. On the one hand, trade and economic relations between China and the EAEU must be within the framework of the rules and regulations of the WTO, which indicates the absence of China’s desire to create a parallel global trade and economic system based on relations with the EAEU. On the other hand, China is making an attempt to seize primacy in the WTO from Western countries and to emphasize its commitment to the established rules of trade and economic relations in the world.

It should be noted that China is in no hurry to evaluate the agreement on trade and economic cooperation with the EAEU. The process of ratification of the agreement in all member countries of the EAEU may last more than six months, which means that the possibility of a real assessment of the document and its significance for the parties will not open until 2019.

In China they talk about the elitist nature of the agreement. It was noted that the entire period of interaction between the EAEU and the PRC in matters of trade and economic relations, as well as in matters of integration of the EAEU and the Belt and Road initiative, the leaders of states played the first fiddle. As a result, thanks to the significant personal support of the Chairman of the People's Republic of China and the leaders of the EAEU member countries, it became possible to complete negotiations on the agreement.

The document is considered as part of China’s policy within the framework of relations with countries participating in the Belt and Road initiative. The agreement is called an important milestone in the construction and development of the Chinese initiative. Listing aspects of the agreement affecting cooperation in the field of trade, intellectual property, government procurement and e-commerce, it is emphasized that the integration of the EAEU and China, more broadly, the Belt and Road Initiative, allows Chinese enterprises to further develop their export potential in relation to member countries EAEU.

China sees the agreement on trade and economic cooperation not only as a document organizing a system of multilateral cooperation between the EAEU countries and the PRC, but also as the basis for the further development of trade and economic relations with them. The agreement between the EAEU and the PRC was mentioned in joint statements with Russia and Kazakhstan on the eve of the SCO summit.

Speaking about bilateral cooperation of the PRC using the example of Russia, the agreement has not yet been noted as a breakthrough or primary document. On the contrary, the document is named among the routine practices of bilateral interaction, which, despite significant progress, require additional efforts and consolidation of results.

Speaking about the view of the Chinese press and think tanks on the possibilities of trade and economic interaction in Eurasia, the first place comes not from the EAEU, but from the SCO, which is gradually gaining more and more importance within the framework of Chinese foreign economic strategy.

Of interest is the material on promoting the deepening of economic cooperation in the SCO, published on the eve of the organization’s summit in Qingdao.

The goal of developing economic interaction in the SCO is to promote regional simplification of trade procedures and liberalization of institutional mechanisms.

The importance of the Belt and Road initiative for the development of the SCO and the need to strive for the creation of an SCO FTA were emphasized. Achieving this result is possible through reforming the commercial system of countries, strengthening the legal structure, as well as jointly fighting corruption and moving towards economic interaction. The reachability of the SCO FTA can be seen through the synergy between the organization and the Chinese initiative.

The SCO is also seen as the basis of a regional “community of common destiny.” The SCO represents a new type of international relations, which is based on respect, fairness and mutual benefit. A new type of international political and economic relations in the SCO was formed by the “Shanghai Spirit”, which is based on trust, mutual benefit, equality, respect for different civilizations and the desire for common development.

The SCO is promoting economic cooperation and forming a community of economic interests. Thanks to the Belt and Road Initiative, the region's infrastructure has been improved, which affects the development of trade among member countries of the organization.

The development of humanitarian cooperation was emphasized. Events are held for cultural exchange and exchange in the field of education and science. Thanks to this, the social basis for the development of a society sharing a “common destiny” is formed.

The interaction between China and the EAEU depends on many factors both in domestic politics and in international relations. The EAEU is not the only platform considered by the PRC as the basis for economic interaction with post-Soviet Eurasia.

There are noticeable active attempts to put the economic agenda at the forefront within the SCO. The main nuance is that all possible mechanisms of interaction are in the context of the development of the Belt and Road initiative, which, according to the PRC, is beginning to act as a measure of economic integration in Eurasia.