Tuesday, June 17, 2014

Russian Economic Cooperation as a Eurasian Union Rivaling the E.U.?

At the end of May, 2014, Russia signed an economic treaty with Belarus and Kazakhstan that “forges closer trade and labor ties among the former Soviet republics.”[1] Even though the new economic ties fall short of another European Union, Russian President Vladimir Putin referred to the new trading relationships as the Eurasian Economic Union, which I contend is deliberately misleading. Being implicitly part of the category mistake, the E.U. itself could be further misunderstood as a consequence.

“Today, we are creating . . . a major regional market,” Putin said at the signing ceremony. In addition to establishing a common market characterized by free trade, the economic treaty coordinates the financial systems of the three countries and coordinates their respective industrial and agricultural—but not energy—policies along with their labor markets and transport systems.[2] Such an arrangement harkens back to the European Coal and Steel Cooperative, which was formed by six European countries in the wake of World War II in order to keep an eye on German iron production and possible re-militarization. Indeed, cooperative is a more fitting label than is union; as Bakytzhan Sagintayev, Kazakhstan’s deputy prime minister pointed out, “We fought over every letter of the agreement to make sure there was no political integration. . . . If Russia wants anything in the agreement, it needs our consent.” Therefore, the enhanced economic coordination falls short of the dual-sovereignty that characterize both the E.U. and U.S.

In the European case, qualified-majority-voting means that a state may find itself on the losing side of a vote in the European Council. That is to say, France may find itself bound by a federal law in spite of having voted against it. In fact, representatives in the European Parliament who live in the state of France may have voted for the new law! The E.U. goes far beyond any treaty between (and obliging) governments. Indeed, the exclusive competencies of the E.U. mean that some governmental sovereignty has been transferred to the federal level.

Similarly, the residual sovereignty remaining with the American states means that the U.S. federal authority is also delegated. Additionally, the Russian economic cooperative does not establish a legislative body directly elected by citizens without respect to their respective states, such as the European Parliament and the U.S. House of Representatives. Strictly speaking, treaties are limited in that they can bind only states, rather than forging direct effect, or a direct political relation between individuals and a federal institution. Hence Putin’s economic treaty differs fundamentally from the E.U. basic law and the U.S. constitutional law.

In short, Putin’s use of the word union to describe a treaty that coordinates trade between three sovereign countries is erroneous at best, and in all probability disingenuous too. The category mistake is doubtless an attempt at propaganda to resurrect the notion of the old Russian empire even as Ukraine was leaning to the West rather than back into the fold. The real damage from Putin charade of diction may occur to the west, where too many Europeans were still under the illusion that their states too were still sovereign even as they were subject to E.U. rules, directives, and regulations. This misimpression has weakened the E.U. even as its responsibilities have increased. Imagine a parent saying to a teenager, “we expect you to take on the responsibilities of being a young adult, but we are still going to treat you like a child.” The teenager would quite understandably be confused and utterly frustrated at the sheer unfairness of the mischaracterization. “I’m not a kid anymore!”

At the crux of the matter of Putin’s incorrect use of the word union, dual-sovereignty and direct-effect, as in the establishment of direct citizen-federal relations, separate the E.U. and the U.S. as unions from economic coordinative treaties, and even from alliances, between sovereign governments. Put another way, the U.S. is more than the U.S. Senate and the E.U. is more than the European Council. Both federal levels have legislative, judicial, and executive machinery that goes beyond the intergovernmental sort that a treaty could establish. Nice try, Mr. Putin.

[1] This and all other quotes in this essay are taken from: Anna Arutunyan, “Russia, 2 Other Nations Sign Pact,” USA Today, May 30, 2014.
[2] Ibid.