SINGLE ECONOMIC SPACE (SES)

Participants: Belarus, Kazakhstan, Russia, Ukraine
Background
On February 23, 2003 the Presidents of Belarus, Kazakhstan, Russia and Ukraine declared about the creation of the Single Economic Space (SES). The purpose was to create a single integrated economic block that provided for the internal free movement of all factors of production, and for effective policy coordination with respect to macro-economic issues. The intention was further to provide a foundation for trade and industry interests from within the region to compete effectively in the global marketplace.
The High Level Group (HLG) was established to prepare an economic integration agreement and to develop organizational and legal foundation for realization of the SES project.
On September 19, 2003 at Yalta summit in Ukraine the heads of state of Belarus, Kazakhstan, Russia and Ukraine signed an economic integration agreement. The agreement stipulated that the SES project would be in conformity with the principles of international law, and more especially in compliance with World Trade Organization (WTO) rules and standards. The process was further to draw on the experience and legislation of the European Union (EU).
About fifty contracts must be concluded to implement the SES project. At Yalta the concept of the creation of the SES was also approved that is an integral part of the signed agreement.
On January 15, 2004 the Government of the Russian Federation approved the economic integration agreement. On February 16, 2004 President Vladimir Putin submitted this document to the State Duma (the lower chamber of the Russian Parliament) for ratification. On April 20, 2004 the agreement was ratified by the State Duma.
Along with the Russian Parliament, on April 20, 2004 the agreement was ratified by the Verkhovna Rada of Ukraine with 265 votes “for”. “Our Ukraine”, “Yuliya Tymoshenko Bloc” and the Socialist Party of Ukraine (SPU) voted against the ratification.
In April 2004 the Agreement was ratified by the Parliaments of Belarus and Kazakhstan.
On September 15, 2004 at Astana summit Presidents of four countries approved the list of 29 basic legal documents to be signed as a matter of priority and directed to deepen the further economic integration.
Experts took the creation of the SES controversially. Ukrainian analysts postulated that Ukraine shouldn’t participate in the SES project since it contradicts the Constitution of Ukraine. They are also concerned that the final agreement should not conflict with Ukraine’s ambitions to join the European Union. This would suggest that the SES in its final form would be compatible in many essentials with the EU’s single market structure.
Russian experts consider the creation of the SES as President Vladimir Putin’s own integration project. There were underlined Vladimir Putin’s high care about the SES destiny and the new format of Russia’s integration policy in the CIS when the priority was given to economic interests. Analysts particularly point out that in the SES project were involved countries whose participation share in the CIS economy ran up to 80%.
A serious problem of the SES project is an absence of conception. No implementation timetable has been set out, either for agreeing each phase of the programme, or for attaining the final objective. It delays implementation of the decisions made.
According to the decisions made in June 2006 at the Minsk summit of the Eurasian Economic Community member-states, formation of the customs union (CU) will be continued within the framework of the EAEC that used the results of the preliminary work done within the Single Economic Space projects. Agencies charged with the SES formation will act on the platform of the EAEC Secretariat. The decision is appropriate as the goals and tasks of the EAEC and the SES are virtually identical: creation of the common market and single economic space.
Major Objectives
According to the documents accepted, the SES project aims to create favorable conditions for effective development of the economies of the four member states. The governments have to carry out a series of coordinated and substantive measures relating to institutional, organizational, legal, regulatory, and commercial policy reform.
The participants of the SES set themselves the following targets:
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Formation of the free trade area without exemptions and limitations
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The non-use of anti-dumping and other safeguards measures
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Harmonization of technical and other regulatory standards and other non tariff barriers
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Macro-economic harmonization in areas of tax and fiscal policies, exchange rate policies and interest rates
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Creation of conditions for the completely free movement of all factors of production
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Harmonization of the legislature to such extent that it is required for the SES functioning including the trade and competition policy
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Creation of a fair commercial and trading environment
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Carrying out a uniform competition policy
Documents
The SES activity is adjusted by the following regulations and standards: the economic integration agreement and the concept of the creation of the SES. Both documents were signed and approved at the Yalta summit on September 19, 2003. In April 2004 the four countries completed their internal ratification procedures, and have already had their first review meeting at Astana in September 2004, at which it was decided to complete negotiations on 29 basic legal documents, and to present these for agreement by July 1st, 2005.
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The Statement of the Presidents of the Republic of Belarus, the Republic of Kazakhstan, the Russian Federation and Ukraine  Doc
Managing Bodies
The SES managing bodies are the Council of Heads of State of the SES and the Commission of the SES (in the documents they are determined as the single regulatory body). Currently, the SES Commission is not formed, so the High Level Group (HLG) that prepares documents for the meetings of the Council of Heads of State acts as the main executive body.
It is decided to create a transtate body (the uniform regulating body) which will gradually accrue powers.
At the interstate level the SES functioning is coordinated and managed by the Council of Heads of State.
The Council of Heads of State has the following authorities:
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Decision making as concerns the future prospects of integration within the SES
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Control of the performance of the Complex of Basic Measures
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Development of the trade and economic policy in respect of the non-participant countries
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Decision making as concerns affiliating of the new members with the SES
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Decision making on unification of the competition, customs and tariff policies
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Reviewing the SES Commission reports
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Making other decisions on principle issues of the SES functioning
According to the documents accepted, the Commission will be the regulatory body of the SES.
The Commission is supposed to be vested with the following authorities:
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Assuring the implementation of the SES purposes and tasks
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Preparation of the reports on the SES functioning
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Drafting the regulatory legal acts and other documents required to achieve the objectives of the SES
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