Soviet Union 2.0?

The Eurasian Economic Union was officially founded last week with a treaty signed by Russia, Belarus, and Kazakhstan. Casey Michel doubts the new institution will do much to shake up the world order:

Modeled on the European Union’s economic constructs, the new union will represent a market of 170 million, and will boast a total GDP of nearly $3 trillion. The EEU will serve as the maturation of the current customs union shared by the three nations, and will allow further economic integration — increased free movement of goods, streamlined trade regulation, unified macroeconomic policy — between member states. And the EEU has potential to keep growing. If Putin somehow manages to woo the remaining post-Soviet (non-Baltic) nations, the EEU’s market could jump to some 300 million members and just under $4 trillion in combined GDP.

But that swell is far from plausible. Even before the EEU became official, members had many doubts about its benefits. Kazakhstan, Central Asia’s most dynamic economy, has failed to procure the expected benefit from membership in the customs union, and the EEU looks to continue the trend. Involvement with the current customs union has continued to delay Kazakhstan’s accession to the World Trade Organization, with the WTO citing “discrepancies” surrounding the external tariffs that will continue under the EEU. Meanwhile, Russia joined the WTO on its own, rather than as the bloc originally proposed.

Beauchamp is also skeptical, calling the union “weak and doomed”:

[I]f this is really Putin’s big plan, Brussels can probably breathe easy. The Eurasian Union is weak. It’s not much more threatening than Russia on its own is — which is to say, far less threatening than people seem to think.

Let’s start with wealth, the simplest point. Even including the two countries who haven’t joined yet but plan to — Armenia and Kyrgyzstan — the Eurasian Union mounts about a sixth of the European Union’s GDP. The vast majority of that wealth comes from Russia, so it’s not like Putin is getting access to huge new markets by signing this deal.

What’s more, Russia’s economy is suffering mightily in the wake of its Ukraine adventure: Western sanctions have sent its stock exchange and the value of its currency against the dollar in free fall. There’s just no way an expanded economic relationship with a series of much smaller countries could help Russia weather more economic punishment if it decides to expand its expansionist ambitions in Ukraine or outside of it.