4. The EAEU: Intentions and Limitations
Russia’s strategy of striking a series of individual deals with potential member states facilitated the rapid launch and widening of the EAEU. However, this has not been accompanied by Russia’s willingness to imbue the organization with the formal institutional capacity necessary to live up to the grand idea of a regional common market. With members unenthusiastic about an economic union in the first place, Russia agreed to enshrine institutional flexibility and weak formal commitments in the Astana Treaty. However, this has left the EAEU’s long-term viability as an economic union in doubt.
Formal equality
As an organization, the EAEU consists of several governing bodies, in which member states are equally represented. These are the Supreme Council (meeting at the level of heads of state), the Intergovernmental Council (meeting at the level of heads of government), and the two-tier Eurasian Economic Commission (see Table 1). The upper tier of the commission, the EEC Council, which is its principal body, consists of deputy heads of government, whereas the lower body, the collegium, consists of ministers nominated by member states but who must act as non-political representatives.
Table 1: Decision-making bodies of the EAEU
|
Body |
Member state representation |
Decision-making mode |
Frequency of meeting per treaty |
|---|---|---|---|
|
Supreme Council |
Heads of state |
Consensus |
Once a year |
|
Intergovernmental Council |
Heads of government |
Consensus |
Twice a year |
|
Eurasian Economic Commission Council |
Deputy heads of government |
Consensus |
Once a quarter |
|
Eurasian Economic Commission Collegium |
Professionals (4-year term) |
Qualified majority or consensus |
Permanent body |
Source: Authors’ research
All bodies, except the EEC Collegium, make decisions by consensus. Formally, the collegium can adopt certain acts by a two-thirds majority. However, the scope for such supranationality is limited: all politically sensitive decisions are reserved for the EEC Council.35 This mode of decision-making ensures that no member state can be bound against its will. These formal provisions restrict Russia’s ability to impose its agenda and therefore assure partners of their nominal parity within the union.
The formal equality coexists with informal means of influence. Of particular concern to the members has been Moscow’s dominance over the EEC Collegium and its departments responsible for key operational aspects of the integration agenda.36 This unease was demonstrated when, in the autumn 2013, the Kazakh president complained about Russia’s influence over the EEC’s departments.37 As a consequence, Kazakhstan sought explicit guarantees for the EEC Collegium’s political independence from member states in the Astana Treaty, it remains to be seen how effective this has been.
More important, it is high-level political bargaining that shapes decision-making within the EAEU. For example, countries have refused to sign key EAEU legal documents, such as the Customs Code in December 2016, in order to secure further benefits or resolve disputed issues, such as gas prices and other bilateral grievances.38 Russia’s repeated generosity with regard to energy prices and security is premised on continued loyalty and the acquiescence of other members. But following the launch of the EAEU, Russia has become less attentive. This has led to member states engaging in brinkmanship to achieve their goals. Balancing their own priorities against their ability to withstand Russian pressure is made possible by the sheer complexity of the organization.
Notwithstanding nominal equality, the organizing principle of Eurasian integration is geopolitical and economic strength rather than a formal structure. Russia’s drive to launch and sustain the EAEU implies a willingness to adhere to and be constrained by the rules of the EAEU. However, Russia repeatedly displays hegemonic behaviour within the EAEU and the individual deals it has struck with member states undermine the formal design of the EAEU. If the participation of states can be negotiated and secured on an ad hoc basis, due to Russia’s sheer might, then Russia has little motivation to comply with the common rules of the union. Ultimately, economic integration with countries that have small economies further reduces Russia’s respect for the common rules, particularly in the post-Ukraine crisis context where security interests come to the fore. This is evident in a tangible reduction in Russia’s attention to the technocratic, institutional detail of integration since 2014.
Common institutions
The ability to enact the ambitious integration agenda of the EAEU is critically dependent on the strength of its common institutions. Deep, EU-style integration, which the EAEU claims to emulate, entails a considerable sacrifice of sovereignty in favour of delegating competences to common institutions. This is vital as the EAEU plans to move on from liberalizing trade to the development of common policies and the harmonization of regulatory and economic institutions of the participating states. Furthermore, effective common institutions are particularly important in the case of the EAEU because of the low quality of governance overall:
The members of the Eurasian Economic Community […] are similar in terms of institutional quality and much-needed improvements cannot merely rely on the forces of convergence. Instead, member states face the challenge of creating supranational structures with better governance capacity than national institutions, which may eventually help lift the overall institutional standard in the region.39
The Eurasian Economic Commission is the key institution tasked with managing further integration. Its decisions are deemed to be binding and ‘directly applicable’ in member states. Yet, the powers of this supranational body are curtailed in several areas. It is telling that the final version of the Astana Treaty excluded any designations of the commission as a supranational institution, which was proposed in previous drafts.
Despite the delegation of powers, the commission’s autonomy from member states is limited and revocable. A member state that disagrees with a decision of the collegium or the council of the commission can appeal to higher bodies. This has informally become known as the ‘Belarusian elevator’ system.40
Furthermore, the commission is a part of a decision-making system akin to the hierarchical organization of executive power in member states, known as the vertical system. Domestic decision-making is centralized with little respect for state institutions. Within the EAEU’s hierarchical, politicized system, there is little scope or incentive for the commission to take key decisions; instead, it tends to prepare draft decisions for the higher councils, involving heads of state or government.41 As Putin’s adviser Sergei Glazyev pointed out, decisions are taken with input from national governments as well as higher levels of the union’s decision-making structure.42 However, it is high-level politics that ultimately determines the pace and direction of integration, which results in the imposition of unrealistic timetables and top-down priorities on the commission. By the same token, the technocratic agenda and compliance by the commission are undermined when ‘high politics’ allows member states to unilaterally depart from the common regime.
The commission is too weak to promote integration. The Astana Treaty that established the EAEU weakened the commission by removing some of its previous powers on monitoring the compliance of the member states. Notably, the commission is no longer entitled to bring a country before the court in case of non-compliance, as it was during the EACU and SES phase.43 When the collegium has raised the problem of non-compliance with a member state, its notification has amounted to little more than a plea for action. Indeed, during the so-called ‘meat war’ between Russia and Belarus, the Minister of the Commission Sidorskii acknowledged that the commission may deem Belarussian meat products to be compliant with standards, but the commission lacks a mechanism to influence domestic institutions in a non-complying member, in this case Russia’s food safety agency, Rossel’khoznadzor, to remove the punitive measures it had imposed on Belarusian meat.44
Critically, the concept of a binding law of the union is more symbolic than real, even when the acts of the commission are defined as having authority. This is because member states determine the domestic reach of such legal acts depending on their own constitution. In fact, the very notion of ‘direct applicability’ and ‘supremacy’ of Eurasian law has already been challenged by none other than the Russian Constitutional Court.45 As such, member states remain the formal ‘gatekeepers’ with regard to the application of Eurasian law in a domestic context.
Finally, common institutions are further undermined by the design of the judicial body of the EAEU. The Astana Treaty set up the Court of the EAEU, which can rule on inter-state disputes as well as hear appeals against the commission, including those launched by commercial entities. Indeed, the court’s predecessor, the Court of the Eurasian Economic Community, was quite active in ruling on specific appeals from businesses and attempted to develop union law in a similar way to the EU.46 The Astana Treaty, however, curbed this tendency, excluding the decisions of the court from the category ‘law of the Union’ and stipulating in a rather convoluted fashion that the decisions ‘do not change and/or invalidate any norms of the law of the Union in force and the legislation of the member states, nor create new ones’.47 Similarly, commentators have observed that many of the changes in the institutional set up of the court have weakened it, raising concerns about its independence and effectiveness.48
Nominally, the EAEU is an international organization with a considerable pooling of sovereignty. Yet a close examination of the institutional design reveals that the common institutions are made deliberately weak in order to minimize disruption to domestic institutions and policies of the member states.
Implementation, commitment and capacity
In founding the EAEU, member states committed themselves to a number of obligations. The nature of these commitments varies across different areas of integration, amounting to a highly complex regime. Yet, even where countries have made far-reaching legal commitments – such as through their participation in the Customs Union – there are no effective common monitoring or enforcement mechanisms to ensure that states follow through on their promises. Compliance can be prompted by high-level diplomatic pressure on specific issues, but ultimately it depends on the sincerity of member states’ commitment and domestic capacity.
Overall, the top-heavy integration regime reproduces the domestic systems of governance of the member states. Individual agreements between Russia and the other member states reflect the specific priorities of the respective leaders – they agree to formally participate but without any genuine underlying commitment to multi-faceted, deep economic integration. As such, domestic parliaments rubber-stamp these deals into law, with little sense of the obligation to implement the treaties that they have approved.
With key decisions being taken in EAEU member states by powerful, largely unaccountable political leaders, little time and attention is dedicated to the technical aspects of compliance. This is not conducive to those integration decisions that require a transformation of domestic institutions and policies. Even if political leaders were fully committed, the sheer speed and scope of integration is jeopardized by the absence of systemic political, administrative and judicial reforms in member states. Furthermore, the required modernization of domestic institutions to facilitate effective integration – such as, for example, dismantling the monopolies controlling the Armenian economy – would disrupt rent-seeking networks and impinge on the interests of those close to political leaders. Given that further integration in the EAEU mould would disrupt ‘business as usual’ inside the countries, there is little incentive for it to happen.
The poor governance characterizing EAEU member states, including Russia, creates a formidable obstacle to the effective functioning of the union as a rules-based regime. And yet, the EAEU explicitly abstains from promoting the rule of law and good governance in its member states. If anything, the Astana Treaty seeks to ensure that integration ‘respects the specificities of the political order of its member states’.49 As a result, even though the planned integration might lead to modernization, for example, through the simplification of customs procedures, further integration ultimately depends on the willingness of domestic political regimes and the quality of governance in member states.
To sum up, launching an economic union as the ultimate platform of integration implies an intention to strengthen a common regime. In comparison with the preceding period of 2010–14, however, the Astana Treaty re-affirmed the intergovernmental rather than supranational features of integration. Member states’ preferences for maintaining control over their commitments means that there is limited buy-in to the EAEU supranational ethos. Certainly, the intergovernmental mode of decision-making offers numerous advantages to the member states – above all, the flexibility to tailor integration to their changing preferences. Yet, the lack of formally binding provisions limits the scope and pace of Eurasian integration to the least sensitive, non-contentious areas. Even within so-called ‘safe’ areas, the EAEU framework lacks mechanisms to ensure domestic compliance, which remains highly dependent on the state’s often questionable underlying commitment and capacity for implementation.
35 The list of 130 such powers includes the adoption of technical standards and changes to import tariffs on certain goods.
36 These include all powers of the commission not reserved for the EEC Council.
37 President Nazarbayev referred to the participation of Russia’s Ministers in meetings of the Russian government allowing them to receive guidance on specific issues. He also protested about the minimal time given to evaluate lengthy drafts prior to their tabling for approval. Kazinform (2013),‘Kazakhstan nameren vstupit’ v VTO do sozdaniia Evraziiskogo ekonomicheskogo soiuza – Glava gosudarstva’[Kazakhstan intends to join the WTO before the creation of the Eurasian Economic Union – head of state], Kazinform, 24 October 2013, http://inform.kz/rus/article/2599908 (accessed 20 Jan. 2015).
38 Klysinski, K. (2017), ‘The Risk of Escalating Tensions in Minsk-Moscow Relations’, OSW Analysis, 4 January 2017, https://www.osw.waw.pl/en/publikacje/analyses/2017-01-04/risk-escalating-tensions-minsk-moscow-relations (accessed 10 Jan. 2017).
39 EBRD (2012), ‘Integration Across Borders’, Transition Report, p.78.
40 Karliuk, M. (2015), ‘The Eurasian Economic Union: an EU-like Legal Order in the Post-Soviet Space?’, HSE Working Paper BPR/LAW/2015.
41 Bail’dinov, E. (2014), ‘Dogovor o Evraziiskom ekonomicheskom soiuze: shag vpered, dva shaga nazad’ [The Eurasian Economic Union treaty: one step forward, two steps back], Evraziiskii iuridicheskii zhurnal, Nr. 10(77).
42 Politicheskii Kaleidoskop (2017), ‘Glaz’ev o proval’nykh perspektivakh EAES’ [Glazyev on the disastrous prospects of the EAEU], 24 January 2017, http://k-politika.ru/glazev-o-provalnyx-perspektivax-eaes (accessed 28 January 2017).
43 This power was granted in Article 20 of the Treaty on the Eurasian Economic Commission.
44 Eurasian Economic Commission (2017), ‘Sergey Sidorskii: “Produktsiya zhivotnogo proizhozhdeniya Belarusi otvechaet vsem trebovaniyam veterinarno-sanitarnogo kontrolya EAES”’ [Sergey Sidorskii: Products of animal origin from Belarus meet all veterinary and sanitary requirements], 11 January 2017, http://www.eurasiancommission.org/ru/nae/news/Pages/11-01-2017.aspx (accessed 20 Feb. 2017).
45 Judgement of the Constitutional Court of the Russian Federation, Avangard-Agro-Orel Ltd (Nr 417-O, 3 March 2015), where the Constitutional Court refused to recognize the direct applicability of a decision of the commission and a judgement of the Court of the Eurasian Economic Community when in breach of the established standards of protection of human rights and the constitutional foundations of the Russian Federation, see Petrov, R. and Kalinichenko, P. (2016), ‘On Similarities and Differences of the European Union and Eurasian Union Legal Orders: Is There the ‘Eurasian Economic Union Acquis’?’, Legal Issues of Economic Integration, 43:3, pp. 295–308.
46 Ispolinov, A. (2013), ‘First Judgments of the Court of the Eurasian Economic Community: Reviewing Private Rights in a New Regional Agreement’, Legal Issues in Economic Integration, 40:3, pp. 225–246.
47 Article 102 of the Statute of the Court, Annex 2 of the Astana Treaty.
48 Karliuk, M. (2015), ‘The Eurasian Economic Union: an EU-like Legal Order in the Post-Soviet Space?’ HSE Working Paper BPR/LAW/2015.
49 Article 3 of the Astana Treaty.