The Role of the Eurasian Economic Union in Trade and Industrial Policy of Russia
The Eurasian Economic Union (EAEU) was established in 2015 and so far consists of five nations (Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan) One cannot deny that the EAEU has several defects such as too much dominance of Russia among the member states, an imbalanced network of intra EAEU trade, relatively low importance of intra EAEU trade for the member states, tendency to postpone market integration of crucial sectors like oil gas and differences of import tariffs as a result of Kazakhstan's accession to the WTO. We should, however, evaluate true merits of the EAEU for Russia in the context of its actual political and economic developments, not of the classic economic integration theory. It is noteworthy that the concept of the EAEU was proposed by Vladimir Putin on the eve of 2012 Presidential elections of Russia. Meanwhile Putin, who put 'modernization' of Russia on the top of the agenda, pursued innovation and new industrialization of Russian economy. Putin argued that so as to achieve these goals Russia should improve investment climate and enhance investment merits and that the creation of the EAEU was one of the efforts in that direction. Russian automotive industry is an important touchstone in this regard. Manufacturers of passenger cars in Russia used to concentrate on Russian domestic market, paying almost no attention to foreign markets because of high production costs within Russia. The creation of the Customs Union, a predecessor of the EAEU, however, lead to a unification of import tariff on passenger cars among Russia, Belarus and Kazakhstan, resulting in a rapid expansion of Russia's new cars exports to the two partner countries, which used to be occupied by used cars. Thus, the EAEU plays a positive role in developing Russian automotive industry, a pivotal sector for new industrialization of Russian economy. It is true that the markets of Belarus and Kazakhstan are not sizable enough for