Natalia Shagayda, head of the Gaidar Institute’s Agrarian Department, on the air with Sputnik radio program, discussed the issue of whether the products manufactured inside the EAEU could successfully displace imported products from the domestic market, and the benefits this could bring to ordinary consumers.

According to Natalia Shagaida, it would be a great exaggeration to talk about any serious dependence of the Union member states on foreign supplies.

“Each country has a dependence on certain products, but that is insignificant in terms of a general market. Russia has failed to meet the self-sufficiency criteria for milk and fruit (in 2020, the corresponding indices were 84.1% for milk, and 41% for fruits and berries), but her EAEU partner, Belarus, demonstrates an oversupply of milk. Kazakhstan, Armenia and Kyrgyzstan have the potential to export fruit to Russia. Currently, Russia has an excess of chicken meat, which can go to Kyrgyzstan, Kazakhstan and Armenia,” the expert explained.

According to the latest relevant data presented in the report released by the Eurasian Development Bank (EDB), in 2019, the share of imported food products and agricultural raw materials in the EAEU market was 11%.

Natalya Shagaida believes that import substitution plays an important social role. This is how the member states create additional jobs and support their national business. In the long run, the substitution of foreign products can bring down retail costs, but in order to achieve this, the EAEU members should facilitate for manufacturers their access to the Union’s markets.

 “The main problem for all countries is how to achieve product sales. The EAEU has been expanding its sales markets. Early potatoes, carrots, cabbage, onions and garlic can be imported from southern Kazakhstan, Kyrgyzstan or Armenia until the time when Russia has grown its own crops. If there is no monopoly on supplies, these products should be cheaper than Russia’s imports at the end of winter, even those from Egypt. Thus, it is necessary to seriously simplify the existing procedures for the movement of goods. Each barrier means a rise in the product price,” the expert concluded.

However, this problem is already being dealt with by the Eurasian Development Bank, which has been analyzing the trade turnover between the EAEU member states, Tajikistan and Uzbekistan. Economists are examining the balances of trade in food products and the existing infrastructure between the member states in order to find the most optimal transport corridors capable of reducing supplier costs.