What a Eurasian Union Means for Washington

Putin's attempts to bolster regional ties have many in the West concerned.

Two key events, the planned withdrawal of U.S. troops from Afghanistan and Vladimir Putin’s impending return to the Kremlin, have reopened a long-standing debate in Russian foreign-policy circles about Moscow’s relations with its post-Soviet neighbors. While outgoing president Dmitri Medvedev downplayed Moscow’s ambitions to dominate the post-Soviet space and encouraged greater cooperation with the United States in the context of the war in Afghanistan, Russia’s regional strategy increasingly focuses on promoting integration through a variety of economic and security institutions. Putin has long been a proponent of this approach, which he discussed in detail in the Russian daily Izvestiya last October, calling for the formation of a “Eurasian Union”—an EU-like association of post-Soviet states that would deepen economic ties among members, ultimately paving the way for further political integration.

Some foreign observers view the Eurasian Union idea as a veiled attempt to restore the Soviet Union, whose collapse Putin famously termed the “greatest geopolitical catastrophe of the [twentieth] century.” Whatever else it portends, the Eurasian Union is clearly not that. Moscow has long since jettisoned its missionary ideology and no longer has any interest in subsidizing its neighbors. Moreover, Putin and other Russian leaders have accepted that Moscow cannot keep all fourteen other post-Soviet countries in its orbit. The Eurasian Union and other recent regional initiatives such as the Collective Security Treaty Organization (CSTO), Eurasian Economic Community (EurAsEC) and the Single Economic Space (SES) encompass a core group of states with extensive economic ties to Russia whose leadership supports—willingly or unwillingly—deeper integration.

Though worries about a new USSR (or “USSR lite”) are overblown, the United States has reason to be wary. While the economic and political logic for deeper integration across parts of the post-Soviet region is strong, and although regional integration could strengthen weak economies, especially in Central Asia, Russian-sponsored integration also brings another threat: deepening dependence of neighboring countries on Russia that could compromise not only development but also foreign-policy autonomy.

For now, the United States should withhold judgment until Putin’s intentions for the Eurasian Union are clearer, particularly with regard to the balance between economic and political aims and the extent to which Moscow allows its neighbors to freely choose whether or not to become members.

Ever Closer Union?

Putin advocates using existing multilateral institutions: the nascent SES, the Russia-Belarus-Kazakhstan customs union and EurAsEC (which also includes Kyrgyzstan and Tajikistan, with Belarus, Moldova and Armenia as observers) as the building blocks for constructing a closer political union between Russia and its neighbors.

This planned Eurasian Union would lower trade barriers, harmonize regulations and currency policies, and eventually lead to deeper political association. If this sounds like the growth of the European Union, that is deliberate. Putin’s Izvestiya article portrays the Eurasian Union as modeled directly on the EU and even suggests that a strong Eurasian Union would be a natural partner for the EU, capable of negotiating with Brussels over the eventual creation of a joint economic space stretching from the Atlantic to the Pacific.

While that vision may be far off, economic integration within Eurasia has potential benefits for many regional states. As regional integration proceeds in much of the world (not just through the EU but also via NAFTA, ASEAN and Washington’s proposed Trans-Pacific Partnership, among others), the post-Soviet space remains largely on the sidelines. A lack of horizontal trading links and isolation from global markets contribute to the region’s persistent underdevelopment.

The most significant benefits of a new Eurasian Union would be the creation of a huge single market and the lowering of barriers to the movement of goods and people. That would make it easier for migrant workers from Central Asia to move back and forth to Russia for work and to legally repatriate their earnings. And since the USSR fostered regional specializations (little industry was placed in Central Asia, for example) and supply chains that crossed republic—now international—borders, integration could also lower production costs by letting each member focus on areas in which it has a comparative advantage.