SCO Ministers Discuss Possible Free Trade Area

Premiers and Prime Ministers from the eight member states of the Shanghai Cooperation Organization (SCO) gathered in Sochi, Russia, this week for the SCO’s annual Heads of Government meeting. Issues of economic integration were high on the agenda for many of the delegations in attendance, with both short-term development projects and the longer-term goal of creating a Free Trade Area garnering support from member states. China’s Premier Li Keqiang emerged as one of the main advocates for the creation of a Free Trade Area, urging the SCO to “accelerate consultations” and advocating in favor of expanding institutions of regional economic cooperation. At the conclusion of the meeting, members approved a joint communique indicating their support for an “open, non-discriminatory, and rule-based multilateral trading system” and their strong opposition to protectionist policies, according to the Chinese state-run Xinhua News Network.

Russian Prime Minister Dmitry Medvedev, however, was more cautious in his support. While he signalled support in principle for a Free Trade Area, he noted that Russia’s “primary integration association” was still the Eurasian Economic Union (EAEU), and that any SCO free trade agreement would need the support of the EAEU as well as the SCO.

Medvedev played up the ongoing trade negotiations between the EAEU and China as a model for a potential SCO Free Trade Area, saying that Russia “first need[s] to have some practice” with this model of trade agreements. Li also highlighted areas in which Sino-Russian economic ties can be improved, including large-scale development projects and cooperation among small- and medium-sized enterprises in both countries.

Russia’s lukewarm stance towards a Free Trade Area did not stop Li from pursuing bilateral agreements with other member states over the course of the meeting. Li framed many of these efforts, including proposed transportation infrastructure projects in Tajikistan, under the umbrella of China’s One Belt, One Road, initiative. Li also discussed increased Sino-Tajik agricultural cooperation with Tajikistan’s Premier Qohir Rasulzoda. While meeting with Kyrgyz Prime Minister Sapar Isakov, Li again emphasized the need for growing China’s cross-border infrastructure to facilitate the flow of goods.

Also on the agenda for the meeting were security issues, including discussions of an anti-extremism treaty and a regional security center. Li noted that ensuring security and combating terrorism was a necessary foundation for promoting economic development and growth.