Eurasian Economic Community (EurAsEC): Legal Aspects of Regional Trade Integration

Sherzod Shadikhodjaev
JEL codes: 
KIEP Working Paper

The Eurasian Economic Community (EurAsEC) is an international economic organization designed to effectively promote the formation of a customs union and a single economic space among six CIS countries: Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. Moldova, Ukraine, and Armenia have observer status.

As a newborn child, the EurAsEC has yet to overcome internal and external challenges. The main internal challenge is arguably a two tiered legal system that has emerged as a result of diverse speed integration in the EurAsEC. The external challenge would be posed by (1) other regional integration projects with similar purposes and subject matter, and (2) the membership of EurAsEC countries in the
WTO. With respect to other regional projects such as the Single Economic Space between Belarus, Kazakhstan, Ukraine and Russia, there is a need to coordinate them with the EurAsEC. As for the WTO membership issue, EurAsEC countries opted for WTO accession in parallel with the formation of the customs union. Considering the fact
that Kyrgyzstan has already entered the WTO, and the remaining members are at different accession stages, the pursued parallelism is certainly very challenging for the affected EurAsEC countries.

The formation of the EurAsEC customs union will have certain implications for third-party countries. First, products from third countries will be subject to the CCT and common non-tariff barriers at the EurAsEC external borders while they will be able to freely move inside the single customs territory with the biggest market in the CIS. Second, the EurAsEC customs union, once established, will be able to enter, on behalf of its members, into trade arrangements with third countries. Third, the coordinated WTO accession policy of EurAsEC countries may produce for WTO members similar market access opportunities to these countries. Fourth, the alteration of the bound duties of Kyrgyzstan and possibly other EurAsEC members that will
have joined the WTO prior to the formation of the customs union will require them to negotiate compensatory adjustment with the WTO members concerned. Finally, in the future the EurAsEC customs union may become a WTO member with a new voice in WTO decision making.