The EAEU is shopping for partners in Asia. Middle finger to the West or sound trade policy?
The Russia-led Eurasian Economic Union has been on an expansion spree this year, signing a free trade agreement with Serbia, negotiating another with Singapore, and discussing one with India. Late last month an interim trade agreement with Iran came into effect. Talks with China are underway. News reports suggest the EAEU is also exploring FTAs with Egypt and Turkey.
How will the gains from trade with these countries be distributed among the five EAEU members – Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia?
We can assemble some clues from an earlier FTA, with Vietnam, which came into force in 2016, the year after the EAEU was born. It has boosted trade, though the gains are uneven and mostly favor Vietnam.
Up until 2011, the countries that would form the EAEU mostly had a net trade surplus with Vietnam – meaning that they exported more to Vietnam than they imported from the country. The trend flipped that year, with the trade deficit reaching $1.3 billion in 2018, according to data from the World Bank.