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SEEC outcomes: Moldova granted Observer State status at the EAEU, Union countries reinforcing foundation for sustainable economic development and interaction with third countries, implementing Digital Agenda, and expanding single services market

SEEC outcomes: Moldova granted Observer State status at the EAEU, Union countries reinforcing foundation for sustainable economic development and interaction with third countries, implementing Digital Agenda, and expanding single services market

5/14/2018

In the course of the Supreme Eurasian Economic Council (SEEC) meeting having taken place on May 14 in Sochi (Russia), a number of significant decisions were adopted in the spheres of integration, macroeconomics, trade, digitalization, services market, transport, agricultural sector, and technical regulation.
 
The Eurasian Economic Commission (EEC) jointly with the governments of the five countries will prepare a declaration on deepening of integration association and at the next scheduled meeting of the Supreme Economic Council will submit this document for discussion of the SEEC Members. This was stated by the Chairman of the EEC Board Tigran Sargsyan following the meeting's results.
 
The event was attended by the Prime Minister of the Republic of Armenia Nikol Pashinyan, the President of the Republic of Belarus Alexander Lukashenko, the President of the Republic of Kazakhstan Nursultan Nazarbayev, the President of the Kyrgyz Republic Sooronbay Jeenbekov, the President of the Russian Federation Vladimir Putin and the Chairman of the EEC Board Tigran Sargsyan. The meeting was also attended by the President of the Republic of Moldova Igor Dodon.
 
Opening the meeting the Chairman of the SEEC Vladimir Putin pointed out that Russian presidency is wholly focused on the Union consolidation, on additional encouragement for bringing closer the five countries’ economies and ultimately – on facilitation of comprehensive development of the States. According to Russian President, prominence shall be given to the following priority tasks: enhancement of efforts for the creation of single goods and services markets, further development of trade and investment relations, consolidation of production and technological cooperation. The Head of the Russian Federation thinks it “necessary to further pursue the line aimed at bringing closer currency and financial and monetary policies of our countries, to build up new and more efficient transport and logistics chains”.
 
Serious achievements have been already made in many of these directions. “In general, the Eurasian Economic Union is developing very dynamically, - noted Vladimir Putin. – Thus, for instance, in 2017 gross domestic product of the participating countries increased by 1.8%, industrial production increased by 1.7%, while agricultural production – by 2.5%”.
 
Besides, the inflation rate in all States fell on the average within the Union down to 3.1%. Foreign and domestic trade condition has improved. Supplies of goods and services to the markets of third countries increased by 24.4%, while commodity turnover between the EAEU Member States gained more than 26%.
 
In the opinion of Vladimir Putin, it is important to procure further development of integration processes. “Good opportunities for enhancing cooperation are opening in nuclear power industry, in the field of renewable energy sources, in ecology, medicine, and space industry”, - mentioned the Head of the State. In these advanced industries, it is essential to expand production cooperation, to work in concert over new technologies and know-how, to introduce innovations that meet requirements of the world economy and global technological development.
 
Priority will still be placed on elimination of remaining restrictions and exemptions that impede free movement of goods, capital, and labour; on implementation of the EAEU Digital Agenda. “We focus on creating the most favourable conditions for the development of entrepreneurial activity, in particular, through working systematically with business circles and paying attention to their preferences”, - stated the President of the Russian Federation.
 
As noted by the Chairman of the EEC Board Tigran Sargsyan, there are about 60 obstacles and barriers nowadays, for which the countries fail to achieve consensus. However, political willpower is of crucial importance for dealing with these problems. “The Presidents keep on stressing the necessity to deepen our integration association by eliminating all these barriers, exemptions and restrictions in order to make national governments leave behind national selfhood related to protection of their manufacturers and provide for equal terms of competition for all market players. And these issues will be in the spotlight of our Commission”, - Tigran Sargsyan said.
 
There is an understanding within the EAEU in respect of the necessity to overcome 66 obstacles. Over the last year, the EEC managed to remove about 13 barriers. This year the Commission will work on the elimination of about ten barriers.
 
The Supreme Eurasian Economic Council adopted a number of key decisions for the development of Eurasian integration.
 
The SEEC approved the Regulations on the Observer State status at the EAEU and adopted a decision on granting such status to the Republic of Moldova. The Observer State status at the Union is stipulated by Article 109 of the Treaty on the EAEU. Pursuant to the regulations, representatives of the State having such status may, upon an invitation, attend the meetings of the EAEU governing bodies though having no right to participate in the decision-making process, and may also obtain the documents adopted by the Union’s governing bodies, except for confidential ones. A State having the observer status shall refrain from any actions which may damage the interests of the Union and its participating countries.
 
The baselines of macroeconomic policy of the EAEU States for 2018 – 2019 were approved.
 
The top-priority objectives of economic policy for the medium term will include activation of the process of economic growth recovery and creation of a foundation for sustainable economic development of the Union countries. Achieving these objectives suggests the implementation of joint measures within the EAEU as well as national measures taken by the countries for the establishment of favourable macroeconomic environment, stimulation of investment activity, improvement of business climate, creation of conditions facilitating increased performance in the real economy.
 
Governments of the EAEU countries are advised to take into account the baselines upon implementation of their macroeconomic policy. The Commission will analyse measures taken by the Union States in the field of macroeconomic policy in terms of their compliance with the approved baselines.
 
The SEEC Members discussed the implementation progress of the Union’s Digital Agenda until 2025. In particular, they mentioned that a sufficient regulatory framework has been established for launching the Digital Agenda, an environment is being formed to elaborate digital transformations in the top-priority areas, expert platforms are being created, initiatives and projects are being considered.
 
The digital initiative management office established at the Commission works out more than 10 proposals obtained from businesses and public authorities of the Member States. They are specifically related to operation and development of digital traceability system (including identification); introduction of electronic supporting documents and their mutual recognition in the EAEU countries; creation of the Eurasian e-recruiter market, a dedicated venture fund of branch-wise digital platforms, digital Eurasian transport corridor, industrial cooperation and subcontracting network, etc.
 
A research under the first obtained initiative, the one focusing on introduction and reciprocal recognition of electronic supporting documents in the EAEU, is now being launched. The work over pilot projects for the establishment and development of digital goods traceability system has been commenced. Expert platforms for the issues of data economy, regulatory “sandboxes” and other priority issues of the Digital Agenda are being developed.
 
The SEEC approved the Agreement on the procedure of conclusion, termination and suspension of international treaties of the Union with third States, international organizations or international integration associations.
 
A proposal to conclude an international treaty may be submitted by a EAEU country, a member of the Commission Council – first deputy prime minister of any of the Union countries or a third party. Besides, the EEC Board may address to the Commission Council a request to initiate this issue.
 
If all the Member States are eager to consider the proposal on concluding such treaty, then the preliminary analysis of its economic expediency shall be conducted by the relevant advisory bodies under the auspices of the EEC Board. Prior to potential conclusion of a preferential trade agreement the project shall be analysed by a joint research team.
 
A decision on signing, termination or suspension of international treaties shall be made by the Supreme Eurasian Economic Council (SEEC).
 
The key conclusions of the report on implementation of the Main Directions of International Activities of the Eurasian Economic Union for 2017 include the following: the EAEU pursues consistent line aimed at consolidation of international cooperation, while the established system of international interaction allows comprehensively accomplishing tasks on geographic and quantitative growth of exports as well as attracting foreign investments and technologies.
 
The SEEC Members were also presented a report on implementation of liberalization plans for certain services sectors within the EAEU.
 
The document was prepared based on the results of monitoring and control over the execution of liberalization plans in 2016-2017 by the competent authorities of the Union States and the EEC’s governing bodies. It contains the findings of comparative analysis of regulation in the Union countries, work outcomes of subject-matter working groups as well as the reasoning of adopted decisions with an algorithm and recommendations for the implementation of activities under each liberalization plan.
 
The governments of the Member States and the Commission were charged with activation of work for the implementation of the above plans that were approved by the SEEC decision in December, 2016 as well as carrying out of the relevant activities within the set deadlines.
 
Amendments have been introduced to the list of services sectors (subsectors) covered by the functioning of the Union’s single services market.
 
Prior to the SEEC decision, there were 43 such sectors. At the same time, the Union countries had previously set a strategic goal in the sphere of trade in services – to make another 18 sectors approved by the SEEC decision in December, 2016 a part of the single services market through implementation of liberalization plans by 2022.
 
The new SEEC decision helped to add up nine out of 18 sectors to the market: services related to production and distribution of motion pictures and video films, video films screening, services related to owned or leased real estate, services related to rent and lease of pleasure crafts without operator. This list also includes services in the field of advertising, scientific advisory services in geology, tourist services, and services related to research and development.
 
Upon adoption of this decision as many as 52 services sectors will be functioning in the single market format. They are rendered in the EAEU countries without restrictions, exemptions and additional requirements and conditions; without a requirement of incorporation as a legal entity on the territory of any Member State; based on the authorization for services rendering obtained by the service provider in his participating country; with tacit and unconditional recognition of professional qualification of personnel of the service provider.
 
Thus, by 2021 more than 60% of the scope of services rendered in the Member States are planned to be provided in compliance with the single market rules.
 
Councils of the Heads of authorized authorities of the EAEU Member States were created in the spheres of accreditation, standardization, agricultural sector and transport.
 
The new auxiliary bodies of the Union will be composed of the Heads of the relevant national ministries and agencies as well as EEC Board Members – Ministers in charge of these areas of activity. The Councils of the Heads will serve as additional platforms for coordination of work in the above spheres of the EAEU countries’ economies.
 
The SEEC Members were presented reports on the first results achieved by the Republic of Armenia and the Kyrgyz Republic over the two years in the EAEU.
 
The most significant effects have been achieved by Kyrgyzstan from the free movement of labour, goods and services which, in particular, entailed an increase in the number of monetary wire transfers to Kyrgyzstan from the Kyrgyz workers employed on the EAEU territory (in 2016 – 1.9 bln US dollars – almost 30% of GDP and 102.3% of the country’s national income), and increase in volumes of export-import transactions. Share of services in the country’s GDP structure has also increased.
 
The report on Armenia’s participation in the EAEU mentions that the country having seamlessly contributed its efforts to the Union’s activity gains economic benefits. Thus, thanks to “returns to scale” the volumes of trade in industrial products of Armenia and the Union States in 2016 raised by 40.3%, and in follow-up of 2017 – by another 57.4%. The EAEU States and the EEC were commissioned to consider the provisions of the reports in their work upon determination of further directions of integration development within the EAEU.