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    December 20, 2015

    A Eurasian Latin America? EEU signs new agreements with Mexico, Chile, and Peru

    December 20, 2015 -
    Anna Garde, PolitRussia
    Translated for Fort Russ by J. Arnoldski 

    "The Eurasian Economic Union is aiming for Latin America"

    In early December, information that the Eurasian Economic Union is likely awaiting an expansion appeared. According to the Eurasian Economic Commission’s Minister on the Development of Integration and Macroeconomics, Tatyana Valovaya, a memorandum is planned to be concluded with Mexico.

    Now it is likely that with agreement and “good attitude,” such a document could be signed next year. Despite the fact that Mexican business is not so familiar with the Eurasian Economic Union’s market, the new proposal might be of interest to entrepreneurs. In order to expand their knowledge on the economic benefits of cooperation, informational presentations to the business community of Mexico are being encouraged. Such events have already been held in Chile, Peru, and Uruguay. According to results of the first two, the Eurasian Economic Union concluded a memorandum on cooperation. 

    Contact between Latin American countries and the Eurasian Economic Union began back in 2012. Chile became the first Latin American country which managed to agree on cooperation. The signing of a memorandum took place in June o this year in the framework of the International Economic Forum in St. Petersburg. 

    In September, the country’s ambassador, Juan Eduardo Eguiguren, in commenting on Valovaya's trip to Chile for conducting further negotiations, said: “Chile is interested in negotiating a trade agreement with the EEU because such an agreement would strengthen and develop trade between us in both directions, and this would be profitable for both Chile and the member countries of the Eurasian Economic Union.” 

    On October 2 in Santiago, the Joint Commission for Cooperation between the EEU and Chile held its first meeting. The Chilean government put the main focus on trade liberalization, and therefore was instructed to make a list of the main barriers to the access of countries of the union to the market. In addition, the country is interested in increasing trade with Russia and cooperation in the investment sphere. 

    At the moment, despite the decline in total foreign trade between the EEU and third world countries, a positive dynamic has been maintained with Chile. In 2014, the trade turnover between the two countries grew by 19.2% and increased by 9.1% for October 2015 in comparison to the same period last year. 

    Against this background, contracts between Russia and Chile are expanding. As Russian Newspaper noted, by the end of 2014 bilateral trade between Russia and Chile amounted to 740 million dollars, which is more than $80 million more than the previous year. 

    Russia is among the five largest partners of Chile in the field of trade, and it supplies this Latin American partner with fertilizers, synthetic rubber, paper and cardboard, and iron, steel, and vodka. Meanwhile, agricultural products, wines, chemical products and textiles com from Chile to Russia. 

    At the end of October, the 8th meeting of the Intergovernmental Russian-Chilean Commission on Trade and Economic Cooperate took place, a number of agreements in the sphere of trade on agricultural products, education, science, technology, and investment cooperation were signed.

    On this note, as TASS reports, the representative of the Chilean Foreign Minister, Andres Rebolledo, also noted the role of the commission in strengthening cooperation not only with Russia, but also with the other countries of the Eurasian Economic Union.

    The second country which concluded a memorandum on cooperation with the EEU was Peru. A document was signed on October 6 in Lima. Exports from the union’s countries to Peru increased 1.6 times and imports by .7% from January to June 2015.

    The country has long been interested in cooperation with the organization. This was announced back in November 2014 during the visit of the Peruvian president Ollanta Humala in Moscow. Despite the fact that during his election campaign the current president focused on developing relations with the United States, he is not striving to strengthen cooperation with Russia.

    During his visit, the question of participation in Russian Railways construction projects on the territory of Brazil and Peru was discussed. A number of agreements were concluded during a meeting between the Peruvian president and Vladimir Putin. They focused on trade, economic, scientific, and technological cooperation as well as fisheries, the environment, tourism, and the fight against drug trafficking. 

    Peru is also interested in Russian investments. Cooperation continues to expand. Not long ago, during the climate conference in Paris, the leaders of the two countries signed a document on strategic partnership. 

    Trade turnover between the Russian Federation and Peru is not as large as with Chile. but it nonetheless deserves attention in this context. Russian deliveries to Peru make up only .8% of the total and cannot compete with the volume of trade with, for example, China and the US, whose shares of deliveries amount to 21.1% and 20.9% respectively. 

    Nevertheless, the Russian Federation supplies its Latin American partner with oil, fuel commodities, fertilizers, cereals, inorganic chemicals, paper pulp, nuclear reactors, rubber, electrical machinery, sound recorders and sound equipment, and plastic products. Russia, in turn, buys fruits, nuts, fish and other seafood, coffee, tea, spices, cotton, felt, yarn, some medicinal plants, vegetables, and ore from Peru. 

    In the context of cooperation between the EEU and Latin American countries, the project of joining the union with the Chinese “New Silk Road” project is gaining momentum. In 2008, China stated that relations with Latin America should be built on a strategic basis.

    The main stream of Chinese investments in the region is directed towards extractive industries, particularly hydrocarbon production. In recent years, China has even managed to squeeze out the United Sates, the main partner of countries in the region, in economic terms. The US remains a key economic partner for Chile, Peru, Colombia, Mexico, Brazil, Argentina, and other countries. 

    Therefore, EEU association and the “New Silk Road” project might expand to the Latin American region, which would allow the majority of developing economies of the world to unite. This could also aid contacts established within the BRICS framework.

    Thus, the creation of a major, intercontinental free trade zone is in good hands, and this will become an impetus for developing the economies of all countries. 
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