The Eurasian Economic Union - South Korea free trade area project

The aim of the research is to explore the reason for the postponement of the Eurasian Economic Union - South Korea negotiations on a free trade area. For this aim the paper first compares the current indicators of Russia and Kazakhst an's trade and economic ties with South Korea. Then it analyzes the 2013 expert recommendations for the conclusion of free trade agreements (FTA) between the Eurasian Economic Union (EAEU) and other countries, as well as the EAEU's experience of negotiatin g FTAs during the period from 2015 to September 2018. It finally focuses on the relations between the EAEU and the Republic of Korea in the context of the FTA negotiations. To write the paper the author used official materials of Russian government agencies and EAEU institutions. The research reached the following conclusions. South Korea ranks as Russia's top economic partner in East Asia in terms of trade and investment. The Eurasian integration within the Eurasian Economic Union has become a new factor for Russia - South Korea relations. The core of the EAEU is the Customs Union which transferred a significant part of the competences to regulate Russia's foreig n economic relations to the level of the EAEU institutions. As for the rest of the EAEU member states, only Kazakhstan has significant economic ties with South Korea. The EAEU enlargement is not on the agenda. But integration with the countries of the Greater Eurasia is developing. The first agreement on a free trade zone (FTA) was signed with Vietnam in May 2015 and entered into force in October 2016. The second FTA agreement was signed with Iran on May 17, 2018. Formal or preliminary negotiations on the conclusion of a FTA are being conducted by the Eurasian Economic Union with India, Serbia, Israel, Singapore, Egypt. Official consultations between South Korea, on the one side, and the Eurasian Economic Commission and EAEU member states, on the other, began in late 2016. Consultations usually precede the formal negotiations on a FTA agreement. Earlier in 2013 Russian experts prepared a comprehensive study of the prospects for concluding free trade agreements with various countries in Asia. It is noteworthy that the most positive was the expert assessment of the feasibility of a FTA with South Korea which could both promote EAEU exports and attract Korean investments. However, the decision of the heads of state and government of EAEU member states to start formal talks with South Korea on the FTA has been postponed. The official reason for the delay is the desire to get from South Korea certain commitments to invest in EAEU states, taking into account the fact that, according to Russian experts, the increase in EAEU exports will be two times less than that of Korea within the FTA. The unofficial explanation is Russia's negative position on the point. The Russian government views the FTA with South Korea as a threat to some Russian industries, including car manufacturing.

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