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INSTITUTIONAL FRAMEWORK MEET THE INTERESTS OF
Harsh conditions of current globalization challenge governments with a profound study of current trends in trade and economic relations between the countries - issues of the international division of labor and effective use of specialization opportunities. In this reality, national economies have to continuously streamline foreign economic policy by enhancing effective integration into the world community.
SHUKHRAT DEKHKONOV,
DEVELOPMENT STRATEGY CENTER EMPLOYEE, JOURNALIST, LEGAL EXPERT, MASTER OF INTERNATIONAL RELATIONS
International experts say that economic integration is a dynamically developing process that affects the economic growth of national economies.
In this sense, the results of the ongoing reforms in Uzbekistan at a new stage directly depend on the integration into the world economy system, specifically, on the development of trade and economic relations with territorially close countries. In this context, the development of trade and economic relations within the CIS and in the framework of a common customs union, which is seen as an important manifestation of economic integration, improvement of its procedural and institutional foundations, remains a highly relevant issue today.
Experts note that in this regard, the Eurasian Economic Union (EAEU) is a
successful and promising integration project in the former Union. Founded in 1995 by the agreement between the Russian Federation and the Republic of Belarus 'On the Customs Union', the Eurasian Economic Community later on incorporated Kazakhstan, Kyrgyzstan and Armenia. By its background and evolution, the Union drew attention of the world community.
There are currently five main economic blocks in the world. These are the European Union, MERCOSUR - the intergovernmental economic bloc of South American states, NAFTA - the North American Free Trade Area, ASEAN - the Association of Southeast Asian Nations, and the EAEU - the Eurasian Economic Union.
The European Union is the most
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developed regional integration block in the world. The scheduled and well-balanced efforts on building integration has yielded positive outcome as economic and political bloc within the European Union. The successful establishment of the customs union and the European Union in its current form, despite all the problems, proves the viability of the integration process in Europe.
MERCOSUR is represented by 55.3% of the population of Latin America and the Caribbean (more than 300 million people), 40% of foreign direct investment, and 33% of the foreign trade of the region's countries. The aggregate GDP of market participants reaches 3.3 trillion USD. The bloc ranks the second largest customs union after the EU in terms of size and economic capacity, and the third free trade zone after the EU and NAFTA.
ASEAN has brought together ten countries in Southeast Asia (Indonesia, Malaysia, Singapore, Thailand, the Philippines, Brunei, Vietnam, Laos, Myanmar and Cambodia). Currently, the population of ASEAN member countries is about 500 million people, the total GDP is nearly 737 billion USD.
What factors influence on the adaptation of countries to economic integration, and what are the reasons for their unification? The main reason is, primarily, economic globalization, and second is the extension international division of labor. Mutual integration of countries is also caused by scientific and technological revolutions of a global scale, and by the need to increase the openness of national economies.
In this sense, it is relevant today to show our position on the heatedly discussed
issue - on the accession ot Uzbekistan to the Eurasian Economic Union (EAEU).
II s worthwhile to deeply analyse the bodies regulating the institutional and legal relations within the framework of the EAEU, as well as their activities, the legal foundations for cooperation, mutual agreements and transactions.
The EAEU member countries (Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan) have ensured the freedom of movement of goods and services, migrants and capital, created a common economic zone with a single customs system.
The Supreme Eurasian Economic Council (SEEC) is the supreme body of the Eurasian Economic Union, consisting of the heads of state of the Union. The Supreme Council considers fundamental issues of the Union's operation, determines the strategy, areas and prospects for the development of integration and makes decisions towards the fulfillment of the goals of the Union.
The Intergovernmental Council, consisting of the heads of government of member states, ensures the implementation and monitoring of the EAEU Treaty procedures, international treaties within the Union and the decisions of the Supreme Council.
The EAEU Court is a permanent judicial
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body with headquarters in Minsk. It ensures equal execution and procedure of the EAEU Treaty by member states, and resolves disputes.
The Eurasian Economic Commission (ECE) is a permanent national governing and regulatory body composed of deputy heads of government of member states and a board of three representatives from each state. Decisions of the Commission are binding on all states.
The Eurasian Economic Commission performs 170 functions of the economic union:
Customs tariff and non-tariff regulation; customs administration regulation; regulation of sanitary, veterinary and phytosanitary measures; regulation of the establishment of trade regimes in relation to third countries; determination of macroeconomic and competition policies; subsidies for industry and agriculture, regulation of natural monopolies, public procurement, transportation and transportation measures, etc.
Here it is appropriate to bring in some facts. The five member countries of the EAEU differ markedly from each other in terms of territory, population and economic volume. The largest country of the union is Russia, the smallest is Armenia. The territory of Russia is 574 times larger than Armenia, and Russia's gross domestic product (GDP) is 170 times larger than that of Armenia. In general, Russia's GDP is about six times higher than the total GDP of the other four members. The total population of the four member states - Armenia, Belarus, Kazakhstan and Kyrgyzstan is about 42 million people,
and the population of Russia is nearly 147 million.
In this regard, the dominant position of Russia is demonstrated by the fact that 87% of the total GDP and 80% of the total population falls on the share of the Russian Federation, as well as the economic insolvency of the EAEU member countries.
At the same time, the principles of the Eurasian
Economic Commission imply that it makes decisions based on equal representation and consensus for each state, independent of its economic power and population.
Also, some experts see the structure of the EAEU as a political block rather than an economic one. Despite this, political issues do not fall under the competence of the Eurasian Economic Commission.
Currently, the EAEU's cooperation with foreign partners is established in accordance with the norms and principles of the World Trade Organization (WTO).
Observer status. In April 2017, a Memorandum of Cooperation was signed with the Republic of Moldova. Presidents of the EAEU countries accepted the appeal of Moldova to obtain the status of an observer country in the Union. In May 2018, Moldova was granted observer status in the EAEU.
Free Trade Area Agreements. In 2017— 2018, the EAEU significantly expanded international economic relations with third countries. To date, agreements on a free trade zone have been signed with Vietnam (October 2016) and Singapore (November 2018), on economic cooperation with China (2017). With the same purpose, an
interim agreement was signed with Iran (2018).
Negotiations are also underway with a number of states on the implementation of the agreement on a free trade zone. Including:
^ India. In 201 5-2016, a joint research group studied the feasibility of concluding an agreement with the Republic of India on the EAEU free trade zone. According to the results, the transition to a free trade regime predicted an 18 percent increase in both EAEU imports and exports with India. In June 2017, the parties signed a statement on the start of negotiations with the EAEU on the creation of a free trade zone.
@ Egypt. At the 2016 meeting of VEEC, it was decided to start negotiations on concluding a free trade agreement with the Arab Republic of Egypt. In December 2017, technical consultations were held on this issue with representatives of the Egyptian side.
& Mongolia. In June 2015, the EAEU signed a Memorandum of Cooperation with the Government of Mongolia in order to promote the development of all-round cooperation between the EEEC and Mongolia, and to remove barriers to the development of mutual trade.
» Thailand. April 1, 2016, marked the launch of negotiations between Russia and Thailand on the creation of a free trade zone.
Apart from that, about 50 countries, including Hungary, Israel, Cambodia, Laos, Pakistan, Peru, the Republic of Korea, Syria, Tunisia, Chile, Japan and Indonesia, expressed interest in creating a free trade zone with the alliance.
Z Israel. On April 23-24, 2018, the parties held the first stage of negotiations in an effort to catalyze the process of concluding a free trade agreement. They signed a document on negotiations to
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conclude an agreement, which specified the areas of interaction and included a number of important agreements on further work and format of negotiations.
The Republic of Korea. In October 2015, the Commission signed a Memorandum of Cooperation with the Public Procurement Service of the Republic of Korea. The document provides for the exchange of experience in the field of public procurement regulation, specifically, in improving the electronic procurement system. On November 30, 2015, the EEC signed a Memorandum of Cooperation with the Ministry of Industry, Trade and Energy of the Republic of Korea on large-scale cooperation in the field of trade.
Collaboration with international organizations. The EAEU actively cooperates with international organizations and institutions. Mutual relations have been established with the World Trade Organization (WTO), Shanghai Cooperation Organization (SCO), Organization for Economic Cooperation and Development (OECD), World Customs Organization (WCO), International Organization for Migration (IOM) and others. Also, the bulk of EAEU member countries are member of the World Trade Organization (WTO).
Cooperation between the EAEU and the CIS states. Cooperation between the EAEU and the CIS countries has been consistently evolving since 2013. The EEC initiated signing of memorandums of understanding and cooperation with the CIS Executive Committee.
In recent years, the ECE and the CIS Executive Committee have been actively cooperating in various fields, especially in the field of coordination of labor migration issues. In November 2018, the ECE and the CIS Executive Committee signed a Memorandum on Enhancing Cooperation.
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Presently, the EAEU and other CIS member countries maintain trade and economic relations through a system of mutual benefits within the framework of the CIS free trade zone, created in 2011.
The interaction of the CIS with the states that are not members of the EAEU ranks among the priority areas of the EAEU's international policies.
In this context, speaking about the priority tasks that have to be addressed within the framework of the Eurasian Economic Union, we believe that there is a primary need to pay close attention to foreign trade and customs policy, which has priority interstate importance. Since the implementation of well thought-out foreign trade and customs policies will become an important factor not only in terms of enhancing integration within the Eurasian Economic Union, but also in terms of active involvement of member states in international trade processes. There are certain priorities in this field:
• Introduction of a full-fledged free trade regime between countries;
• Introduction of unified customs tariffs and unified non-tariff regulatory modes;
• Implementation of the general provisions of the legislation on trade of goods and services and ensuring their strict compliance in the domestic markets of member states;
• Development by member states of unified, coordinated approaches to establishing relations with the World Trade Organization (WTO) and other international economic organizations;
• Ensuring economic security at EAEU external borders.
Also, the institutional and regulatory framework should be improved through:
• Coordination of interaction of national legislation of EAEU member states;
• Unconditional provision of interaction
between the legal systems of the participating countries in order to create a common legal space within the EAEU.
All of the above measures can be implemented based on the mutual equal interests of the EAEU member countries, which can be done by reaching full consensus between the member states. Indeed, the macro level of integration processes in the system of international economic relations implies the creation of a drastically new economic environment at the regional level through intergovernmental coordination of economic policy.
Experts say that the creation of such integration groups at the macro level will ultimately ensure sustainable economic growth across national economies and eliminate social imbalances.
To sum it up, we can say that in current conditions, the development of sustainable economic ties between states based on international division of labor is becoming global. Uzbekistan's membership in the integration association might facilitate its transition to a globally established level of internationalization of economic life through the evolving scientific and technological revolutions in the republic, international trade, capital circulation, modern transport, communications and information systems.
Mutual integration between Uzbekistan and other member countries may lead to an increase in production volumes, widespread and accelerated spread of new technologies, development of infrastructure, a further increase in the role of international economic organizations, foundations, liberalization of trade and markets, and other achievements.
