The expert meeting on the Dynamic between BRI & Eurasia Integration took place on 18 August 2020 and three major questions were discussed:
1- Is there any link between Eurasian integration and BRI development?
2- Will these two projects support or contradict each other?
3- Both projects emphasized on trade facilitation, what is the status quo?
Richard Griffith from the International Institute for Asian Studies in the Netherlands described the link between the two main projects from trade perspective and emphasised that Russia used to be a considerable market but is losing to the EU and China. It is also not as important an investor in Central Asia as China is. Russia is still a crucial supplier and has an advantage in terms of trade costs. Additionally, he argued that in order to integrate the EAEU and the BRI, one could encourage China to trade with EAEU, but this is unlikely and could damage Russian and smaller local economies. Or, one could open Russia to BRI investments, but the country is generally reluctant to take loans/contractors from China. These are the two main challenges to integrating the EAEU with the BRI.
Michael Schumann from the Federal Association for Economic Development and Foreign Trade stated that economic integration between Europe and Asia was deemed desirable in the 90s and is motivated by countries’ different interests. It is important to determine what the relations between Europe and Asia will look like in the future. BRI and EEU do not necessarily contradict each other, but the EU should not interfere with China/Central Asia/Russia relations. The EU should instead reassess its own role in economic integration. Additionally, the EU should dismantle its prejudices and sanctions against Russia. EU/Asia/Russia should distance themselves from the US, and Germany can lead the way here. Schumann advocates setting up chambers in the EU that work with Central Asia, conducting business with Central Asian businesses, etc.
Victor Gao from the Center for China and Globalization (CCG) argued that BRI and Eurasian development are two different circles, but they overlap. The overlap must be increased in order for integration to be possible. Eurasian development can be supplemented by BRI. BRI was a concept of infrastructure and connectivity, but it also included financial connectivity. Current political attacks on China have taken the angle of attacking BRI. Building nation-building capacity and infrastructure is the prerequisite for real economic development.
US and China relations are in freefall, so Central Asian countries are in the uncomfortable situation of having to choose whether to engage with the US or China. Politics get in the way of major infrastructure (e.g. the development of 5G, Erickson and Nokia). It will be necessary to readdress these issues after the US election; the pandemic also complicates efforts toward integration since countries are putting up metaphorical walls to protect themselves. Gao calls for greater globalisation despite the pandemic and politically self-interested behavior of countries.
The moderator of the session, Behrooz Gharleghi raised the first question; there are many debates over the meaning of ‘Eurasian integration’: where is Eurasia, what integration means, etc. Is it possible to envision a future where there is no longer an EU, but rather a Eurasia?
Mr Gao said that this is a dream, and it’s a matter of determining how long it will take for this dream to come true. National politics and state self-interest will likely prevent the possibility of Eurasian integration. It will take a large, collective effort to overcome the challenges that prevent integration. Connectivity projects in each participating country will be key to integration. Eurasia will be a large concept in years to come, and Eurasian integration will be a matter of making the European economy more dynamic.
Moderator’s question: could Eurasia span from Western Europe to China? If yes, then who should lead Eurasia?
Mr Schumann replied that the consequences of the pandemic will include companies moving supply chains closer to home, and Central Asian countries will benefit from this. Eurasian integration should be a guiding dream and vision, but it will likely not happen in the short term. The EU needs to reassess its role in the Eurasian economy, deal with Transatlantic ruptures, and position itself within the US-China conflict. We cannot depend on US leadership.
Rolando Avendano from the Asian Development Bank raised a question: Eurasian integration concerns more than finance, trade, and infrastructure. There are some factors that are underestimated in terms of their role in integration (like environment, sub-regional issues, etc.) What are some of these underestimated factors?
Mr Gao replied that all Eurasian countries need to engage in standardised inter-Eurasian, inter-country commerce. This will open the door to economic integration. We need to ensure that financing is available for projects so that integration can take place, but funding is always a challenge. Concrete, incremental, continuous, sustainable steps need to take toward macro-level goals.
Mr Griffith stated that there are both advantages and disadvantages to labour migration (take the example of the Philippines), but we should not inhibit migration.
Philippe de Lombaerde from the United Nations University raised the last question: What is the potential for negotiating new trade agreements, and what could be their impact on the trade/investment flows?
Mr Schumann replied that more trade agreements would be beneficial and could have a massive impact. We should treat all countries as equals and trust that the EU will eventually shape its own path of development.
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