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Economy

“Transatlantic” future of the Eurasian Economic Union

These days, the Council of the Eurasian Economic Commission (EEC) approved the granting of observer status to Cuba in the Eurasian Economic Union (EAEU). The final decision will be made by the heads of state of the association. What prospects could the Liberty Island expect within the Eurasian Union?

Despite the most difficult sanitary and economic crisis that has developed not only in the countries of Eurasia, but in the world as a whole, today the integration efforts of the EAEU are developing, and this promising union has not lost its attractiveness for many countries.

The EAEU and Cuba began to establish their active interaction in 2018 based on the Memorandum of Understanding. In recent years, the government of the Liberty Island has shown a high degree of interest in deepening cooperation in certain areas, and also twice addressed the issue of obtaining the status of an observer country in the union.

2018

Signing of the Memorandum of Understanding between the EAEU and the Republic of Cuba in Havana, May 2018.

Source: Information Agency “ACN”

Today, the basis of the export matrix of the EAEU countries to Cuba is represented by machinery and equipment, to a greater extent they include trucks and railway locomotives; mineral products, foodstuffs (mainly soybean oil). In turn, food products such as sugar, seafood, spirits, coffee, and tobacco are imported from Liberty Island.

In case of a positive outcome, the status of observer state will further allow Cuba to intensify cooperation with the EAEU countries. The priority sectors for Havana’s interaction within the framework of the association may be: healthcare, industry, energy, transport, and the agro-industrial complex.

On September 24, the delegation of the Republic of Cuba, headed by the Deputy Prime Minister Ricardo Cabrisas Ruiz, visited the Eurasian Economic Commission (EEC). As part of this official visit, joint consultations of the Commission, the countries of the Eurasian Economic Union and the Republic of Cuba were held, aimed at clarifying certain issues regarding the granting of the Latin American country the status of observer state in the EAEU. In addition, on this day, the Cuban delegation met with the Chairman of the EEC Mikhail Myasnikovich and the EEC Minister for Integration and Macroeconomics Sergey Glazyev. Earlier, the Supreme Eurasian Economic Council was informed about the desire of the Liberty Island to obtain the status of observer state in the EAEU, therefore, the heads of the states of the association instructed to conduct joint negotiations with the Republic of Cuba to clarify technical issues and further prospects for cooperation.

During an official visit to the EEC headquarters, the Deputy Foreign Ministers of the EAEU states announced their unconditional support for the initiative of the Latin American country and noted that the association was already interacting with Cuba within the framework of the Memorandum signed in 2018, nevertheless, there was a great mutual desire to deepen cooperation. It is assumed that the Supreme Eurasian Economic Council will make a decision this year, since the Commission, for its part, has completed all the necessary procedures in order to bring this issue to the consideration of the presidents of the EAEU states.

ecuador en directo

Ricardo Cabrisas Ruiz during the official visit to the Eurasian Economic Commission (EEC), September 24, 2020.

Source: Ecuador En Directo.

It is worth emphasizing that the volume of mutual trade of the union with Cuba is still low. The best indicators were in 2018, when the total trade turnover amounted to about $ 420 million US dollars. This is primarily due to the fact that trade is mainly carried out only with the Russian Federation (95% of the total). According to forecasts of economic analysts, the possibilities of interaction between the EAEU countries and Cuba are much higher.

To date, the potential of the economies of both sides has not been exhausted. For example, due to a certain shortage of agricultural machinery in Cuba, the Latin American country may be interested in mechanical engineering products (in particular, Kazakhstan and Russia). In turn, the Liberty Island could offer its professional experience in the pharmaceutical industry and biomedicine, which will be of interest to the EAEU states. As part of the consultations on September 24, it was mentioned that the Eurasian Economic Union and Cuba could start a joint pharmaceutical production.

Joint investment projects were discussed “on the sidelines” of the negotiations. For example, it is possible to build pharmaceutical factories in the EAEU states using the intellectual potential of Cubans in the field of healthcare. Another example is the construction of assembly plants for the production of agricultural machinery in Cuba, based on the developments of the automotive industry of the member countries of the association.

Despite constant criticism of the EAEU from different sides, this association, over almost six years of its existence (date of foundation: January 1, 2015), managed to conclude agreements on free trade zones with countries such as Vietnam, Singapore, Serbia, and also to get closer to the creation of such zones with almost a dozen more states. Nevertheless, the EAEU has only one official observer to this day: since 2018, Moldova has this status.

Until recently, Cuba’s participation in the integration union met with cautious objections from a number of EAEU states. In particular, the fears came from the representatives of Kazakhstan, who argued that the Latin American country could have illusions that with the achievement of observer status, the Liberty Island would begin to claim all the privileges and benefits within the EAEU. For this reason, the Kazakh side made a proposal to develop in more detail the criteria for this very format of interaction.

Despite the extraordinary situation that arose this year related to the coronavirus pandemic, the EAEU and Cuba meetings continued. And one way or another, today we can confidently summarize the fact that negotiations on observer status for Havana have already reached the finish line. Thus, the Eurasian Union has an observer from the New World, and the EAEU acquires “transatlantic” coverage. Despite the fact that the volume of cooperation is not yet very high, the observer status will provide the Liberty Island with the opportunity to significantly intensify this interaction.

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