Does Kazakhstan’s WTO Accession Hinder Eurasian Integration?

 
 

In June, Kazakhstan became the World Trade Organization’s newest member after nearly 20 years of negotiations. While far from the first regional state to join the WTO — Kyrgyzstan joined in 1998, Russia in 2012, Tajikistan in 2013 — Kazakhstan was the first to join after the inception of the Eurasian Economic Union.

As noted in documents related to Kazakhstan’s accession to the WTO, specific commitments accepted by Astana are applicable to other EEU member states:

A unique aspect of Kazakhstan’s rules commitments is the extent of accession specific commitments “accepted” by Kazakhstan, which shall be applicable to and bind the EAEU and its member States on matters falling under the competence of the EAEU. There are 23 commitments which contain measures to be undertaken by “Kazakhstan and/or the competent bodies of the EAEU.”

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This has reportedly irritated some in Belarus. According to Tengrinews (citing Kommersant, a Russian newspaper) the Belarusian Minister of Foreign Affairs Vladimir Makei said that Kazakhstan’s WTO accession might hinder EEU development:

We have preserved a large number of exceptions and limitations that are not conducive to the early establishment of the single economic space, which is the main goal we have sought to achieve. Moreover, its creation was postponed until 2025 and actions of some partners may delay this deadline even further. I particularly mean Kazakhstan’s accession to the World Trade Organization and its commitments (within the WTO) that reduce the level of customs security within the EEU.

The EEU has been a curious, confusing and criticized organization. In theory, the five member states — Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan — are part of an integrated single market, with the future possibility of deeper integration and a single currency. Ideally, the EEU allows for the free flow of goods and people across the union’s borders. But reality has not matched the vision. Areas of contention remained when Kyrgyzstan and Kazakhstan opened their border after the former’s August accession. In addition, there have been several instances of trade restrictions and stopped shipments between Russia and Kazakhstan (and Russia and Belarus).

Deeper disagreements exist as well, particularly over a common currency. Russia has been pushing for the establishment of a common currency and Kazakhstan has firmly pushed back. Belarus is also hesitant; Makei commented that “at this stage, there is no point in talking about common currency. We first need to achieve success in creation of a single economic space.”

The State Duma in Moscow is talking about it, however. Tengrinews reports that on November 10, the CIS Committee’s chairman, Leonid Slutskiy, said progress was being made toward creation of a common monetary unit of account (called evraz), a quasi-currency seen as a presaging step toward a real common currency. Tengrinews wrote that “the introduction of the common monetary unit evraz means that the common currency of the economic union countries is just around the corner.” But that’s not necessarily true, depending on the time scale mean by “just around the corner.” The European Union, for comparison, used a basket of currencies as a unit of account — the European Currency Unit — from 1979 until 1999 when it was replaced by the euro.

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