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Coupling EAEU with China and Europe is key idea of Great Eurasian partnership

Coupling EAEU with China and Europe is key idea of Great Eurasian partnership

Heads of the economic and foreign ministries of the Eurasian Economic Union Member States and the People's Republic of China and Andrey Slepnev, Member of the Board - Minister in charge of Trade of the Eurasian Economic Commission discussed the impact of the pandemic at the global and national economy as well as measures to strengthen international trade on the eve of the first meeting of the Joint Commission for implementing the Agreement on Trade and Economic Cooperation between the EAEU and China. The discussion was held within the plenary session of "Coupling the Eurasian Economic Union and Chinese Belt and Road Initiative" videoforum organized by the EEC with the general support of the EAEU Business Council, Russian Union of Industrialists and Entrepreneurs and Business Russia.

"The pandemic has become a catalyst for a number of processes. First of all, it is the strengthening of digitalization and transiting to a new technological wave. The most alarming trend and the pandemic effect is not a global downturn since World War II being forecasted by the World Bank, but escalating both political and trade conflicts and divided international life in light of paralyzing such universal institution as the World Trade Organization", - Andrey Slepnev stated in his speech. He has expressed confidence that the modern world requires coordination of efforts of all participants involved in international relations. This is the only way to respond to global challenges, guided by rational economic decisions.

Despite a slight decline in total trade due to the pandemic, China remains the main strategic and trading partner of the EAEU Member States in Asia, ranking first in the foreign trade turnover. In January-August 2020, China accounted for 20.1% of the EAEU's foreign trade turnover. Considering the business recession across the globe until the middle of Q2 this year, the reduction in mutual trade turnover between the EAEU and the PRC by 6.3% can be deemed insignificant.

According to Andrey Slepnev, the EAEU could become an economic bridge between the European Union and the Asia-Pacific Region due to its favorable geographical setting and general regulation. "Coupling the EAEU with China, on the one part, and Europe, on the other part, is the key idea of the Great Eurasian partnership we are striving for," - the Minister stated.

Wang Shouwen, Deputy Minister of Commerce of the People's Republic of China, has noted that the EAEU countries are important partners of China. According to the PRC’s representative, the Agreement on Trade and Economic Cooperation between the EAEU and China is an important achievement to implement coupling of the Chinese Belt and Road Initiative and the EAEU. "I am confident that the sides’ joint efforts to implement the Agreement will create a political environment for regional economic integration and make institutional dividends tangible for our cooperation," - stressed the PRC’s Deputy Minister of Commerce.

He has also stated a decline in trade with the EAEU countries from February to August this year, however the slowdown in trade with the Member States was lower than with other partners. Investments in the Union countries were enhanced despite trends and reached 710 mln US dollars, being increased by 7.9% compared to the same period last year.

"The decrease in trade turnover between the PRC and the EAEU is significantly lower as compared to other countries, and we see prospects not only for soonest restoration of trade turnover to the pre-pandemic level, but also for its faster growth. Such opportunities can be opened up by concluding a free trade agreement between our countries," Wang Shouwen considers. "China has already signed 17 free trade agreements with Southeast Asian nations and the effect of these agreements is already observable: the trade turnover between China and partner countries has increased several times."

It is highly likely that in the process of regional economic cooperation the sides actively effectuate the Agreement on Multifunctional Trade and Economic Cooperation with the EAEU, jointly discussing negotiations to be launched on a free trade agreement and actively practicing the China-EAEU-EU trilateral cooperation in the field of transport logistics and trade facilitation through Eurasia, Wang Shouwen believes.

The PRC’s representative has further noted that China invites all sides to protect the multilateral trading system, oppose protectionism, support free trade, upheld the WTO’s values and keep the market open.

Wang Shouwen has noted that China is ready to interact with all the Union countries to cope with challenges for the prosperity and better future of the Eurasian region. "China is ready to work with the EAEU countries, deepen economic cooperation and expand bilateral trade considering the Chinese huge market. It is also important to enhance mutual investments, actively improve the regional business environment and deepen cooperation in manufacturing, construction, infrastructure, agriculture and services," - stated Deputy Minister of Commerce of the PRC.

Igor Morgulov, Deputy Minister of Foreign Affairs of the Russian Federation, has stressed the significance of enacting the Agreement signed between the EAEU and China. The Deputy Foreign Minister has expressed confidence that the first meeting of the Joint Commission on implementing the Agreement is intended to be the start of a qualitatively new stage of coupling of the EAEU and the Belt and Road Initiative development plans.

Igor Morgulov has also turned his attention to the pandemic as a factor that challenged not only public health but also the economy, consequently leading to a global recession. Along with that, he has stated that the situation in the EAEU and China is better than in other regions of the world.

The representative of the Russian Ministry of Foreign Affairs has also agreed with the EEC Minister that the pandemic served as a catalyst for a number of processes, including digitalization. Transforming the global geopolitical landscape and forming a more democratic world order can be observed as well. 

Bakhyt Sultanov, Minister of Trade and Integration of the Republic of Kazakhstan, believes that to restore high pre-crisis rates of trade development, it is important to coordinate efforts between the EAEU and the PRC. "Online trading has increased by 2.5 times during the quarantine. Kazakhstan sets a task to increase the share of online retailing to 15% in 2025. The main objective of e-trading platforms is to reduce barriers to market access for medium-sized business," - the Minister stated. Along with that Kazakhstan plans to launch a digital platform for consumer rights protection on the "single window" principle within the new law "On consumer rights protection".

Bakhyt Sultanov has told about the project to expand the e-commerce component in the Kazakh economy being implemented jointly with the International Trade Center and the China South-South Fund and thanked the Chinese side for its support. "Last year, 50 companies from Kazakhstan were selected to be promoted on the Alibaba marketplace with the gold supplier status. Contracts are already being signed," - Bakhyt Sultanov said.

Speaking about the progress made and plans for the future in terms of developing logistics infrastructure with the use of smooth railway and automobile communications of the Khorgos International Center for Boundary Cooperation, Bakhyt Sultanov called upon for giving this physical infrastructure a Eurasian history.

Varos Simonyan, Deputy Minister of Economy of the Republic of Armenia, shared the social support programs and economic plans in light of the pandemic. He has also noted that "the world after the pandemic will not be the same". At the same time, we should become stronger, develop new proposals and ideas. Speaking about the coupling of the EAEU and the Chinese Belt and Road Initiative, he has noted that the project is designed not only for major players, but the so-called "small economies" could give it greater flexibility as well.

Sanjar Mukanbetov, Minister of Economy of the Kyrgyz Republic, is confident that to strengthen trade relations between China and the EAEU countries, it is required to reduce barriers between the countries, promote mutual export, create joint ventures and further implement scheduled projects in the field of trade. Along with that, he believes that integration between the EAEU and China "was not invented and began yesterday, but goes back to the ancient history". In the meantime, when it comes to national priorities, the construction of the China-Kyrgyzstan-Uzbekistan railway is necessary and important for Kyrgyzstan, according to Sanjar Mukanbetov.

Alexander Guryanov, First Deputy Minister of Foreign Affairs of the Republic of Belarus, has noted that cooperation between the EAEU and China is seen as a way out of the current challenging situation in the world. These are great opportunities for deepening further cooperation between the EAEU and the PRC within the Agreement on Trade and Economic Cooperation between the Union and China entered into force a year ago.

According to him, the Great Stone Industrial Park, proved itself to be as successful project open for investors not only from Belarus and China but all the EAEU countries, has significant prospects. "Bremino-Orsha" is another special economic area to the east of Belarus exploring the aviation component of the transport and logistics route.

Summarizing the discussion, Andrey Spartak, Director of the All-Russian Market Research Institute and RAS Corresponding Member, has noted that the videoforum attendees expressed cautious optimism about economic recovery and stressed the importance of deepening trade and economic relations within the EAEU and between the Union and the PRC as a factor to ensure economic resilience and ability to implement large infrastructure projects, projects in the field of improving digital solutions and developing digital platforms, including e-commerce.