 Good afternoon to all and welcome. It's a great pleasure for me to act to introduce Dr. Jeffrey Makov to you. He's currently Deputy Director and Senior Fellow with the Center for Strategic and International Studies. It's Russia and Eurasia program. The Center is based in Washington, bipartisan and non-profit research institution. Dr. Makov brings a great deal of background and experience to the talk he is going to give us today in relation to Russia. He's an author of Russian Foreign Policy, Great Power Politics, I think in 2011. He's a teacher currently at Georgetown Foreign Service Academy. He has served in a governmental advisory capacity to the State Department. He is working for the Council on Foreign Relations. He holds a PhD from Yale University in diplomatic history and has also been on the fellowship at Moscow State University as well as at Harvard. His talk today is entitled A Tale of Two Unions. Yes it is the two unions being the European Union with which we are so familiar and the Eurasian Economic Union with which perhaps we are somewhat less familiar. Although if imitation is a form of flattery I think we should be suitably flattered that at least in 2011 when he first moved it to the idea in a written in an article in the Izvestia. Prime Minister Putin I think as he was then played some homage to the ideas that had formed the European Union and its free movement and economic integration model as ones that would inspire the Eurasian Economic Union. I'm not sure how much that has turned, well the talk today will tell us how real those parallels or possible parallels have been and what the prospects for them are. So without any further ado I would invite Dr. Meikoff to address you on The Tale of the Two Unions. Thank you. Thank you very much. I beg your pardon I should have said that as usual please turn your mobile phones to silent and the address by Dr. Meikoff is on the record. The question and answer afterwards is subject to the normal of Chatham House rules. Thank you all for coming out. This is my first time at the IAEA and I'm looking forward to chatting with you all this morning. I was asked to talk about the Eurasian Economic Union in light of its relationship with the European Union. And as we just heard when the Eurasian Economic Union which Russia refers to as the EEU but in the West we usually write EEU. This gets fun when you're trying to co-author things with Russians. It was deliberately discussed as a model on the EEU in various ways. It was however part of a longer term vision for Europe that Vladimir Putin and other Russian leaders had supported and discussed for a long time. As well as an aspect of Russia's own approach towards reintegration of the former Soviet space. Something that had been a priority in economic, political, cultural and in some cases even military terms since at least the mid 1990s. Now despite the references to the European Union when the EEU was I'm going to call it was first announced the reality of course has been somewhat different. Why the reality has turned out somewhat differently than it perhaps then it was portrayed in 2011 is what I'm going to talk about with you this morning or I guess now this afternoon. When Putin announced plans for the formation of the Eurasian Economic Union in 2011 he held up the EEU as an inspiration. Now the Eurasian Economic Union had been in the works for some time at this point. Various steps towards the deeper political and economic integration of the post-Soviet countries had been underway for over a decade by 2011 under different names. The Customs Union, the Eurasian Economic Community and then the Political Military side, the Collective Security Treaty Organization. The actual degree of integration that these entities entailed was fairly limited. All of them suffered from significant limitations. During the period when he was campaigning to return to the presidency after stepping down to be Prime Minister for four years, Putin published an essay in Izvestia in October 2011 where he talked about the creation of the Eurasian Economic Union as one of the key objectives for his what would be his third term as president. And he deliberately referenced the EU as a model for what he envisioned the Eurasian Economic Union to be. According to his essay in Izvestia, it took Europe 40 years to move from the European coal and steel community to the full European Union. Here in Eurasia, the establishment of the Customs Union and the common economic space is proceeding at a much faster pace because we could draw on the experiences of the EU and other regional associations. We see their strengths and weaknesses and this is our obvious advantage since it means we're in a position to avoid mistakes and unnecessary bureaucratic superstructures. So we see how you guys have done it in Europe. We see what you've done wrong. We're going to do it differently and meanwhile that means we'll be able to get to the full integration picture in four to five years rather than four years. Now Putin goes on to discuss the Eurasian Economic Union in relationship to the EU and in relation to Europe as a whole. Again, this is quoting from his Izvestia article. Russia and the EU agreed to form a common economic space and coordinate economic regulations without the establishment of supernational structures back in 2003. In line with this idea, we propose setting up a harmonized community of economies stretching from Lisbon to Vladivostok, a free trade zone and even employing more sophisticated integration patterns. We also propose pursuing coordinated policies in industry, technology, the energy sector, education, science, and also to eventually scrap visas. These proposals have not been left hanging in bed air or European colleagues are discussing them as well. So if you were to take Putin at his word in 2011, his vision of the Eurasian Economic Union was this one piece of a wider pan-European Eurasian economic space, something stretching from Lisbon to Vladivostok. Now this is a long-standing Russian objective. When the Soviet Union collapsed and transatlantic and intra-European integration proceeded, the biggest question and a question that arguably still hasn't been answered is where Russia fits. Where does Russia fit in this new institutional infrastructure? And Russian leaders and thinkers dating back to the 1990s have argued that over the longer term the goal has to be to link Russia and Europe together. Now whether the United States is involved is another question. But that some kind of pan-European and Eurasian structure needs to be built. And clearly what had emerged in the years leading up to 2010-2011 didn't look like that. And so Putin's elaboration of Eurasian Economic Union and his discussion of using the Eurasian Economic Union as one pillar for a Lisbon to Vladivostok Economic Association is very much in keeping with this long-standing Russian view of a reconnected reunited Europe, one where the United States may or may not be involved. Now the idea that the Eurasian Economic Union was going to be based on the EU made that rhetorical proposition seem a little bit more reasonable. Because if the EU and the EU are based on the same principles, the same historical experiences, in theory it should be easier to link them together. This idea of creating a single economic space on the basis of these two blocks seems more realistic. The problem is that, which Putin didn't discuss in his essay, is that there are major differences in the way that the two organizations are structured and how they work. As Putin hinted, the EU took 40 years. It was based on gradual institution building. It was based on consensus in democratic societies with countries and populations having a say in the gradual steps towards integration. Moreover, the countries within the European Union are obviously different size in terms of their population and their economies, but there's not one country that has a preponderance of political or economic weight over the others. Germany, which is the largest economy in the EU, accounts for around a fifth of the EU's total GDP. In the Eurasian Economic Union, which includes Russia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, and Armenia, Russia's GDP accounts for about 85% of the total. So there's much less balance, and it's much less clear that an organization like the Eurasian Economic Union would be able to respond equally and in a balanced way to the interests of all of its members. Moreover, of course, those other members, Armenia, Belarus, Kazakhstan, Kyrgyzstan, maybe Tajikistan, which hasn't joined yet, all of them were former, for lack of a better term, Russian colonies. They all have sought to construct their independence and their identities in contrast to their domination by Moscow during the period of the Soviet Union and in some cases the Russian Empire. And to a much greater extent than countries in Europe that came through the experience of the Second World War are very jealous of their sovereignty, are very uncomfortable with the idea of ceding sovereignty to not only a national entity, but to a supernational entity controlled by the former imperial hegemon. And the reaction to the Eurasian Economic Union proposal in many of these other countries was not particularly welcoming. Among large swaths of the population, even if individual political leaders, particularly in Kazakhstan, have been more positive. For these smaller countries, the Eurasian Economic Union looked very much like an attempt to reassert Russian hegemony and to dominate their economies and to reorient their trade flows back towards Russia away from one another and away from the outside world. And so the idea of the Eurasian Economic Union, and particularly one that was going to be constructed in five years, did not go over particularly well in any of these countries, even though for a variety of reasons Armenia, Belarus, Kazakhstan and Kyrgyzstan have said it's joined. Now there's another issue here, in some ways an 800 pound gorilla, and that is Ukraine, because Ukraine was very much at the center of Russia's ambitions when it created, when it elaborated the idea of the Eurasian Economic Union. Ukraine, particularly eastern Ukraine, was very deeply integrated with Russia economically. Culturally there's almost a gradient where it's very hard to draw a clear line between where Russian culture stops and Ukrainian culture starts. Many Russians see Ukraine as being an extension of Russia. Nevertheless Ukraine was heavily industrialized, was moving closer to Europe already, and so part of the ambition behind the Eurasian Economic Union seemed to be to take advantage of Ukraine's gradual drift towards Europe to bring some of that connectivity, some of that benefit to Russia and to the other members. Now Ukraine was always like the other non-Russian post-Soviet states, at best ambivalent about the idea of the Eurasian Economic Union. Under Viktor Yanukovych, who was president after 2010, Ukraine sought to sign an association agreement with the European Union. Now why the kleptocratic government of Viktor Yanukovych was interested in an association agreement with Brussels is another story that we can talk about, perhaps, but it was clear that this was a priority for the Yanukovych government. Brussels, however, made clear that it was impossible to have both the association agreement, which included a deep and comprehensive free trade area with Europe, and also to be in a customs union with Russia. You can't be in a free trade area and in a customs union with some other country that's not part of that free trade area. So ultimately Kiev had to make a choice, and the choice that Yanukovych appeared to make was that he was going to prioritize Europe. Now Russia, Putin didn't particularly like that choice. Yanukovych was summoned to Moscow. He met with Putin at the airport, returned to Kiev the same day, and announced that he was not going to be pursuing the association agreement with the EU. Well, we all know what happened next. Protests broke out in Kiev, with people waving European flags on the Maidan Nizalishnesty, the Independence Square in Kiev. Protests came to be called the Euro Maidan. Through a process of escalation, they eventually led to a revolution, to Yanukovych's ouster, and the installation of a new government that made one of its first orders of business, pursuing and ultimately signing the association agreement with Europe. In doing that, the new government, under Petro Poroshenko, turned its back on the Eurasian Economic Union, and it also withdrew from the CIS, the Commonwealth of Independent States, that was sort of set up as the mechanism for facilitating a civilized divorce among the post-Soviet countries. War broke out, and subsequently, as Russian troops seized Crimea, it intervened in eastern Ukraine, a war that is still going on. Among the other consequences of that war was to deepen the estrangement between Moscow and Kiev, and not only between Moscow and Kiev, but between Russians and Ukrainians. If the gradient separating Russia from Ukraine has always been a gradient, the conflict forced more and more Ukrainians to take a stand on their identity, to identify themselves as Ukrainians, in a way that meant declaring themselves something other than Russians. And so the border, the mental, the cultural, the political border between Russia and Ukraine has grown much harder since the outbreak of this conflict. And what that means is that it's increasingly unlikely that Ukraine is ever going to go back into the Russian fold, whether under Poroshenko or any other Ukrainian leader. So in a sense, there's an irony here. If Russia's vision in elaborating the idea of the Eurasian Economic Union was to link it to the EU, Ukraine's ambition of moving towards the EU was what actually fed this conflict and made this whole vision something inoperative. And of course the Russian reaction was read very closely in Armenia, Kazakhstan, Kyrgyzstan, and elsewhere, and contributed to their reluctance to go down the path that Russia wanted to go down about what the Eurasian Economic Union was going to look like. The European Union has a significant supranational component, the Commission, the Parliament, and all the rest, the European Court of Justice. Now the other non-Russian members of the Eurasian Economic Union have been particularly resistant to the idea of supranationalism. Russia, Russian speakers, raised various supranational components like a common currency, a common parliament, a common political parties, a common court. They never gained much traction in the non-Russian members. And when the Astana Treaty was signed in 2015, which officially established the Eurasian Economic Union, it clearly walked back some of these supranational ambitions. It makes no aspiration to statehood. It doesn't talk about the Eurasian Economic Union as the basis for creating a new state. Intergovernmentalism, another popular EU term, has pride of place over supranationalism. In the Astana Treaty, states jointly pledged to undertake steps towards deeper integration, but it's up to the states themselves to take those steps to make those decisions. The supranational bodies that were set up are staffed by officials who are succumbed from and ultimately answerable to the governments of member states. They're not international civil servants. They're civil servants working for the government of Armenia, Kazakhstan, Belarus, or wherever. Moreover, decisions that are made by the Eurasian Commission can be raised to a higher level in the Council, the Eurasian Economic Commission Council, which is made up of deputy ministers from the various governments. Above that, there's the Intergovernmental Council of Heads of State and the Supreme Council of Heads of State who make the final decisions, and they make their decisions on the basis of consensus. In other words, if the supranational commission makes a decision that member states are unhappy with, they can raise it to the political level, the intergovernmental level, and only then on the basis of consensus can the decision be made. Doing this, raising disputes to the intergovernmental level, is sometimes called the Belarusian Elevate by watchers of the Eurasian Economic Union because the Belarusians have been particularly apt in using it. So what does the Eurasian Economic Union actually do? Has it turned into more than the sum of its parts? I think comparing it to other post-Soviet integration structures that have been set up, particularly on Russian initiative since the collapse of the Soviet Union, the Eurasian Economic Union has had some impact, although perhaps not what Putin talked about in his Vesti article. Its main achievements so far are creating a common external customs tariff and abolishing internal customs borders. So it has facilitated, at least in theory, trade among and between individual members. It's also created some institutions, Eurasian Development Bank, which can act as a lender of last resort, has been particularly important, in theory allowing for the more efficient movement of goods and people within the Eurasian Economic Union. In practice, the impact has been more pronounced when it comes to the movement of people rather than the movement of goods, which is kind of ironic. That's the complete opposite from how it has been in the European Union. In fact, the removing of barriers to the movement of people has been one of the key reasons that countries like Kyrgyzstan, Armenia and others have been willing to join. They have large numbers of labor migrants who go to Russia and to a lesser degree Kazakhstan to work. And Russian efforts to tighten restrictions on migration for non-members of the Eurasian Economic Union was one of the key pieces of leverage that Moscow had to encourage countries like Armenia and Kyrgyzstan to sign up. As far as trade, the volume in trade, the EU trade has gone up a little bit, but it's mostly hub and spoke, which is to say there isn't a whole lot more trade between Kyrgyzstan and Belarus than there was before the EU came into existence. There's more trade between individual countries and Russia, so Russia still sits very much at the center of this organization. The EU has not restrained Russia's attempts to act independently outside the framework of the EU when it sees it as being in its own interest to do that. And again, Ukraine is a good example. So Russia imposed sanctions, not only on Ukraine, but on goods from the European Union in response to the EU sanctions over the war in Ukraine. It did that on its own initiative without consulting its EU partners, something that in Europe would be probably hard to imagine. There's no compensation mechanism set up for the smaller members who may be affected by these sanctions. Instead, the smaller members have taken steps to evade the sanctions. The most famous example, again, is the Belarusians, who began a very profitable business relabeling banned European goods for resale in Russia. So there were stories about finding cans of Belarusian salmon in Russian stores. If you look at a map you realize why that's kind of strange, Belarus is landlocked. Now, again, if this is a well-functioning economic union, these kind of things shouldn't happen. Also, because Russia is very much the economic center of gravity for the entire union, when Russia catches a cold, the entire Eurasian economic union catches the flu. So Russia had a fairly significant economic downturn that was exacerbated by sanctions in the crisis in Ukraine. And it has had spillover effects to the other Eurasian economic union countries, especially because of the devaluation of the ruble that the Central Bank presided over in response to the imposition of the first round of sanctions. By devaluing the ruble, the price of Russian goods relative to locally produced goods in Kazakhstan, Belarus, and elsewhere dropped substantially. So what happened is that Russian consumer goods flooded into the market in a lot of these countries displacing local production. And if elites in these countries were dubious about the Eurasian economic union before, the influx of Russian consumer goods, the negative impact on local production only exacerbated these feelings that they were being taken advantage of. And Russia took its own protectionist measures, which also created problems. Now, despite these problems, the Eurasian economic union is there. It's functioning. It is taking steps towards expanding. There's been a lot of talk about Tajikistan eventually becoming a member, which may or may not happen. Tajikistan is a pretty small economy. The overall impact of it joining would be somewhat limited. But the organization is also interested in signing trade agreements with outside partners, signed one with Vietnam, negotiating others with Israel, Singapore, with other third countries. And, of course, there's the whole question of China and how the Eurasian economic union fits relative to China and fits into Russia and China's relative strategies for Eurasia and Eurasian integration. The Eurasian economic union was announced before what is now being called the Belt and Road Initiative, the BRI. And, in some ways, was a response to concern about the growing Chinese economic presence in Central Asia. Again, Europe and Ukraine played a much more prominent role in Russian thinking around 2010-2011, but the growing Chinese economic presence in Central Asia was not entirely foreign, either. The idea being that if you create a common external customs barrier, you'll limit the influx of Chinese goods into markets in countries like Tajikistan and Kyrgyzstan. And you'll have more trade between those countries and Russia and other EU members. When China announced what was then called the Silk Road Economic Belt in 2013, it called into question the viability of this aspiration vis-à-vis Central Asia. Subsequently, Beijing and Moscow spent a lot of time trying to hammer out the details of linking these two projects together. It's unclear to what extent that's actually going to work. The main transit corridors that China seems interested in building between China's east coast and markets in Europe largely skirt Russia. Nonetheless, Russia is interested in trying to capture as much of that transcontinental trade as it can. The deal that was eventually signed in 2015 between Putin and Xi Jinping to coordinate the Eurasian Economic Union and the Belt and Road, notably, was a bilateral deal. It was a Sino-Russian deal. The Kazakhs, the Belarusians, the Armenians weren't in the room, which again tells you something about how the Eurasian Economic Union operates. Russia hopes that at least by being inside the tent, it'll be able to shape the map of China's Belt and Road and to benefit from whatever extension and trade and investment it brings about. And also that the prospect of plugging into the Belt and Road might make Eurasian Economic Union membership more attractive to other holdouts in the former Soviet Union like Tajikistan, like Uzbekistan, and others. Whether that happens or not, we'll see. So the Eurasian Economic Union remains in flux. The overall plan for its development was derailed by the Ukraine conflict, by Russia's economic crisis, and by the unreality of the vision that Putin laid out in 2011. Nonetheless, it's there. It's functioning. It's having an impact on its members, which is more than one can say about a lot of other post-Soviet integration projects. It doesn't look very much like the EU. It's much more intergovernmental. It's much more top-down. It's much more focused on Russian goals and objectives rather than those of the other members. In the meantime, in part because of the Ukraine crisis, the relationship between Russia and the EU has changed as well. Much less does Russia look to the EU as a model for anything anymore. If anything, Russia's view of the EU has become more apocalyptic, and we've gotten used to talking about how Russia seeks to undermine the EU, how it seeks to promote anti-EU parties, organizations, and candidates in member states. So the idea of partnering up with the EU seems even more illusory now than it did a couple of years ago. Russia thinks that the EU is in crisis, that it doesn't have to worry about what the EU is doing, maybe that it'll fall apart. So as a result, much less interest in this idea of linking. Whether you share that analysis or not, and I'm not a specialist on the EU so I'm not going to say anything more about it, it's clear that the EU and the Eurasian Economic Union are in periods of flux. The relationships among member states are changing, the functioning of the organizations themselves are changing. So even though we haven't seen much in terms of linking these organizations together or of them talking to one another or learning from one another, I think whether they do so in the future is very much an open question. And one that's going to depend on the way that the political winds blow, both in Moscow and in Brussels and in much of the space in between. Thanks.