EU-EAEU Potential Economic Integration: Methodological Approaches to the Assessment of Economic Impact. 1st Workshop Report.

During the last two decades, interest in regional integration has substantially increased. The number of renewed regional trade agreements has swelled. As a result, regionalism has become a dominating factor in the development of world trade. It affects countries' economic and political relations. They are faced with the choice of whether or not they should enter various trade blocs, and which form of integration they should select at each specific stage. The answer to these questions requires political and policy decisions. It also requires quantitative and qualitative assessments of the economic impacts of accession to regional trade agreements. It also requires a clear understanding of the possible positive and negative impact on the macro- and micro-levels, including the impact on the economy as a whole, on specific sectors and industries, large individual companies, the state budgetary and monetary policy, and various population strata. This type of complex, multi-faceted analysis, commonly known as ex-ante, also shows whether the current policy requires modification in order to maximize profits and reduce losses, taking into account the interests of both sides. For countries that have already acceded to regional trade agreements, an ex-post evaluation is also necessary to assess the memberships' efficiency, and how expectations fare against reality. Two years after the Customs Union (CU) of Belarus, Kazakhstan and Russia was created in 2010, the Eurasian Economic Commission (its primary supranational body) becomes an official party in negotiations pertaining to trade relations. In 2012 the CU was supplemented with a comprehensive series of agreements establishing the Single Economic Space (SES) and aiming at a full-fledged common market. These member states have created the Eurasian Economic Union (EAEU) in 2015 and two new member states – Armenia and Kyrgyzstan - have joined in 2015

Futures of energy in Eurasia in a global context. 4th Workshop Report.

The 4th workshop within the IIASA project “Challenges and Opportunities of Economic Integration within a Wider European and Eurasian Space” held on 12-13 May, 2015 in Laxenburg, Austria delivered the latest insights into the risks, uncertainties, trends and opportunities around energy trade and energy security of the EU, EAEU and neighboring countries. The discussions focused mostly on natural gas covering conventional, LNG and shale gas, on nuclear energy, as well as on the potential for a common electricity market between some EU, EAEU and neighboring countries. To foster interdisciplinary and international dialogue on the topic, the workshop invited distinguished academics and policymakers from around the world, including Tair Mansurov, Member of the Board – Minister in charge of Energy and Infrastructure, Eurasian Economic Commission; Péter Balás, Deputy Director General, DG Trade, European Commission and Head, Support Group for Ukraine; Jean-Arnold Vinois, European Commission Directorate General for Energy; Pavel Kabat, Director General and Chief Executive Officer, IIASA; Evgeny Vinokurov, Director, Centre for Integration Studies, Eurasian Development Bank; among many others, with a total of 48 participants. The participants had impassionate exchanges over sometimes rather different views, yet they were able to concur on a number of points. This demonstrates the value of IIASA as a platform for open exchange of views between European and Eurasian experts and policymakers on currently controversial issues in the context of Euro-Eurasian economic integration. Selected Seminar Highlights: During the course of the seminar, the experts brought forward the following proposals: • Creation of a common EU - EAEU electricity market could be useful, since it could stimulate large-scale construction of various types of generation assets in the Kaliningrad Region and in Belarus (nuclear, hydro and thermal power stations), that could provide power to Poland, Lithuania and other neighboring countries. • Euro-Eurasian energy cooperation could be enhanced on the basis of the Energy Charter Treaty (1998) mechanism (although in case of Russia only if it decides to revise its earlier decision to leave the Treaty). • Development by the Eurasian Economic Commission of a common Emissions Trading System (ETS) in line with EU norms can help increase compatibility in the future thus enhancing prospects of a common EU - EAEU emission inventory market. • Joint development of the Arctic shelf can be a promising and prestigious long-term project of economic and investment cooperation between the EU and Russia. • Commitment towards the work of the EU - Russia Gas Advisory Council and the “EU-Russia Gas Cooperation Roadmap till 2050” could be increased by both – Russia and the EU member states. • An international gas research cooperation program between the European Commission and research institutes of different regional players (not only Russia) could be established which might help gaining objectivity and transparency on forecasts in the gas market. • The repeated gas supply crises between Russia and the EU over supply to and transit via Ukraine make the efforts on maintaining cooperation and dialogue between the two even more important. • Despite the fact that Ukraine intends to integrate its energy system into the European Network of Transmission System Operators for Electricity (ENTSO-E), maintaining interconnections with the Russian and Belarusian electricity grid can help them decrease electricity price inflation during the transition period. • Energy efficiency in the Ukrainian household sector is a topic of joint interests and needs. Participants of the seminar proposed cooperation between the Eurasian Economic Commission and the respective Ukrainian research institutions for comparing approaches being adopted both in Ukraine and by the member states of the Eurasian Economic Union. • IIASA’s role as a platform for discussing energy matters between the EU and Russia/EAEU as equals can be crucial. Seminar Focus Areas: During the workshop the participants came to distinguish six game changers that currently affect Euro-Eurasian energy relations and policies. 1. Gas supply diversification of the European market and the rise of shale and LNG 2. Two cornerstones of the EU energy policy – anti-monopoly and supra-national regulations 3. Prospects and implications of energy efficiency improvements and climate change targets across the region 4. Local and regional effects of the Ukrainian crisis onto Euro-Eurasian energy relations and policies 5. Perspectives of the new energy deals between China and Russia 6. Perspectives of EU - EAEU energy market integratio

Non-tariff barriers and technical regulations. 3rd Workshop Report.

The 3d workshop within the IIASA project “Challenges and Opportunities of Economic Integration within a Wider European and Eurasian Space” held on 20-21 November, 2014 in Laxenburg, Austria discussed the major issues related to the compatibility and costs of technical regulations used by different countries and unions, and also the non-tariff barriers affecting the trade among them. The workshop concentrated on major aspects related to the existing non-tariff barriers in trade between the countries of the Eurasian Economic Union (EAEU), the European Union (EU), and other CIS countries. The participants discussed the challenges related to the general non-tariff barriers that exist between the EU, the EAEU, and the CIS countries, as well as possible solutions, particularly in the context of recent economic and political developments. The workshop also discussed the relationship between the norms and principles of international trade law contained in the provisions of the World Trade Organization (WTO); analyzed the legal framework of economic integration in various regions of the world; and reflected on the potential for eliminating unnecessary obstacles to trade, including by mutual recognition of conformity. The workshop was focused particularly on the potential effects of the implementation of Deep and Comprehensive Free Trade Agreements (DCFTA) between the EU and Georgia, Moldova, and Ukraine. It also addressed the economic impacts of the currently applied mutual sanctions conflict” between the EU, the USA and some other Western nations on the one hand, and Russia on the other, their impacts on international trade, and on the potentials of long-term cooperation between the EU and the EAEU. The impacts on economies of other CIS countries, not directly involved, were also touched upon. Harmonization of legislation in the field of technical, as well as sanitary, phytosanitary, and veterinary regulations between the EAEU and other regions, primarily the EU, was addressed in detail. The discussion covered the harmonization of terminology and labeling; harmonization of national and regional standards with international standards; accreditation, product safety, training in the field of standardization and conformity assessment as well as trade facilitation. In order to foster interdisciplinary and international dialogue on the topic, the workshop brought together well-established scientists, policymakers, banks and companies representatives from around the world, including: Péter Balás, Deputy Director General, DG Trade, European Commission; Igor Finogenov, Chairman of the Management Board, Eurasian Development Bank (EDB), Kazakhstan; Pavel Kabat, Director General and Chief Executive Officer, IIASA; Evgeny Vinokurov, Director, Centre for Integration Studies, Eurasian Development Bank; Paul de Lusignan, Leading Expert, Tariff and Non-Tariff Negotiations, Rules of Origin, DG Trade, European Commission, , Stefanie Harter, Head, Liaison Office to the German Ministries of Foreign Affairs, Defence, Interior and Justice, German Agency for International Cooperation, Evgeny Hotulev, Director, Department of Macroeconomic Policy, Eurasian Economic Commission (EEC), Oleg Noginskiy, Director, Ukrainian Association Suppliers of the Customs Union, Veronika Movchan, Director, Institute for Economic Research and Policy Consulting (IER), Alessandro Nicita, Officer-in-Charge, Trade Policy Research Section, Trade Analysis Branch, Division on International Trade, United Nations Conference on Trade and Development (UNCTAD), among many others, with a total of 41 participants. The workshop participants discussed possible ways how non-tariff barriers could be reduced and convergence of technical regulations to the mutual benefit of all parties involved could be achieved. In this context, they also analyzed the opportunities and risks of economic modernization of the East-European partnership countries, if they adapt to European technical regulations and sanitary requirements. Possibilities for providing a unified policy, removing bottlenecks and differences in the sphere of technical regulation in the EAEU countries, was examined; and the impacts of such policy on producers of goods and services in different regions with regard to ensuring their competitiveness were assessed

Trade policy regimes. 2nd Workshop Report.

World-wide international economic policies during the last few decades have shown a rising interest in regional integration in various new forms. Not only has the number of regional integration arrangements expanded, but, even more strikingly, their scope and depth have advanced in a spectacular manner. The analysis of such experiences would be very important for the development of further integration initiatives in the framework of the CU/SES/EAEU as well as for the design of efficient and sustainable integration policies in the Eurasian Economic Union. The questions of creating common and coordinated policies beyond trade will be the most important for the first years in EAEU. Apart from the complex regulatory and governance issues in alternative integration arrangements, other challenges facing the integration on the wider European and Eurasian economic space relate to geopolitical, economic and sectoral heterogeneities in the region. Assuming that the current frictions between Russia and the EU can be resolved, the future trade linkages and other forms of integration between the EU and the EAEU could become an important factor in shaping the Eurasian regional economic development. Any classification of regional economic integration arrangements is based on the different levels or degrees of integration: from the elimination of tariffs and non-tariff barriers for goods (traditional FTA), to the establishment of a common customs tariff (CU), from the freedom of movement of goods only to liberalizing services, as well as the flow of capital and people and, finally, to policy harmonization and the regulatory unification (DCFTA, Single Market, etc). The research and expert communities are now challenged to provide solid, independent and comprehensive analysis and advice to policy-makers on the plausible future scenarios and optimal schemes of economic integration within the EAEU, as well as between the EAEU and its strategic partners, notably the EU. In order to foster interdisciplinary and international dialogue on the topic, the 2d workshop on trade policy regomes invited distinguished scientists, policymakers and business representatives from all Background World-wide international economic policies during the last few decades have shown a rising interest in regional integration in various new forms. Not only has the number of regional integration arrangements expanded, but, even more strikingly, their scope and depth have advanced in a spectacular manner. The analysis of such experiences would be very important for the development of further integration initiatives in the framework of the CU/SES/EAEU as well as for the design of efficient and sustainable integration policies in the Eurasian Economic Union. The questions of creating common and coordinated policies beyond trade will be the most important for the first years in EAEU. Apart from the complex regulatory and governance issues in alternative integration arrangements, other challenges facing the integration on the wider European and Eurasian economic space relate to geopolitical, economic and sectoral heterogeneities in the region. Assuming that the current frictions between Russia and the EU can be resolved, the future trade linkages and other forms of integration between the EU and the EAEU could become an important factor in shaping the Eurasian regional economic development. Any classification of regional economic integration arrangements is based on the different levels or degrees of integration: from the elimination of tariffs and non-tariff barriers for goods (traditional FTA), to the establishment of a common customs tariff (CU), from the freedom of movement of goods only to liberalizing services, as well as the flow of capital and people and, finally, to policy harmonization and the regulatory unification (DCFTA, Single Market, etc). The research and expert communities are now challenged to provide solid, independent and comprehensive analysis and advice to policy-makers on the plausible future scenarios and optimal schemes of economic integration within the EAEU, as well as between the EAEU and its strategic partners, notably the EU. In order to foster interdisciplinary and international dialogue on the topic, the 2d workshop on trade policy regomes invited distinguished scientists, policymakers and business representatives from all over the world, including Andrey Slepnev, Member of the Board – Minister in charge of Trade, Eurasian Economic Commission; Peter Balas, Deputy Director General, DG Trade, European Commission; Stephan Nolte, Senior Economist, DG Trade, European Commission (EC), Pavel Kabat, Director General and Chief Executive Officer, IIASA; Evgeny Vinokurov, Director, Centre for Integration Studies, Eurasian Development Bank; Alexander Knobel, Head, Foreign Trade Department, Gaidar Institute for Economic Policy (Gaidar Institute), Natalia Volchkova, Policy Director, Center for Economic and Financial Research, Assistant Professor, New Economic School, Rahim Oshakbaev, First Deputy Chairman of the Board, National Chamber of Entrepreneurs of Kazakhstan, Stefan Meister, Senior Policy Fellow, European Council of Foreign Relations, among many others, with a total of 45 participants. Thus, the aim of the workshop was to challenge research and expert communities to provide solid, independent and comprehensive support to policy-making on plausible future scenarios and optimal schemes of economic integration within the EAEU, and between the EAEU and its strategic partners. It should be noted, however, that the timing of the workshop has turned out as less than optimal: it coincided with the introduction of the second wave of major sanctions by Western countries, including the EU, against Russia due to the escalating military conflict in the Eastern part of Ukraine. This fact has much influenced the discussion, making it clear that even if the political events are outside the scope of the work of researchers, these still very much influence the possibilities of elaborating realistic solutions and advices, and even more, putting those to practical use

Development of Transport and Infrastructure in Eurasia. 5th Workshop Report.

The 5th workshop within the IIASA project “Challenges and Opportunities of Economic Integration Within a Wider European and Eurasian Space” held 15 – 16 September 2015 in Laxenburg, Austria, discussed the issue of transportation corridors in Eurasia and the opportunities for cooperation between the EU, Russia, the EAEU, China and other regional players concerning transport and infrastructure projects. In order to foster interdisciplinary and international dialogue on the topic, the workshop brought together well-established academics and policymakers from around the world, including: Péter Balás, Deputy Director General, DG Trade, European Commission; Stefan Füle, former EU Commissioner for Enlargement and European Neighbourhood Policy; Pavel Kabat, Director General and Chief Executive Officer, IIASA; Evgeny Vinokurov, Director, Centre for Integration Studies, Eurasian Development Bank; Yuliya Chalaya, Head, Economic Policy Strategies Section, Macroeconomic Policy Department, Eurasian Economic Commission (EEC) among many others, with a total of 34 participants. All speakers underlined the importance ofof an international dialogue for science-policy making on transport and infrastructure projects in Eurasia, particularly in the current context of the implementation of EU-UA AA/DCFTA. The global financial crisis, the US Fed and ECB QE policies, the EU’s fiscal situation and Western financial sanctions on Russia were raised during the discussion as serious bottlenecks for developing large scale infrastructure projects in Eurasia. Selected Seminar Highlights: The workshop concentrated on the major aspects related to transport and infrastructure development and generated the following outcomes: • a comprehensive review of the nexus of economic integration and modernization of passenger and freight transport and logistics infrastructure, including railways (notably, high-speed ground transportation), roads, air and maritime transport; and their impacts on economic, national security and social stability; •analysis of the future of transport corridors in Eurasia: prospects for cooperation among the countries of the region in the construction, modernization and further development of the Eurasian transport corridors (such as the Silk Way Economic Belt, the Trans-Siberian Railway, the “Razvitie” belt, the “Eurasia” waterway) until 2030, in particular, the development of trans-border transport infrastructures and perspectives of the Trans-Eurasian transit; • a detailed survey of opportunities and threats for the cooperation, feasibility and possibilities for win-win solutions in the context of large infrastructure (gas pipelines, waterways, etc.) developments in Eurasia. Seminar Focus Areas: During the workshop the participants came to distinguish four focus points: 1. Overview of transport and infrastructure projects in Eurasia 2. Means of financing of mega transport and infrastructure projects in Eurasia 3. Global players’ logistics interests: playing ball or playing hard? 4. Trade, development and population: cornerstones and limitations to transport and infrastructure projects in Eurasi

Labor market and migration across the Eurasian continent. 6th Workshop Report.

The 6th workshop of the IIASA joint research project “Challenges and Opportunities of Economic Integration within a wider European and Eurasian Space” held on April 13 – 14, 2016 in Laxenburg, Austria, discussed the impacts of migration flows on the sustainable development of the Eurasian region, the labor market challenges, and the potential for harmonization of education systems between the European Union (EU) and the Eurasian Economic Union (EAEU). In particular the workshop analyzed the possible scenarios of cross-border migration (both labor migration and refugee flows), the changing structure of the labor force, as well as their economic and social implications for the labor markets and the economic growth of both the source and host countries in the EU, the EAEU and the countries in their joint neighborhood. It also considered such practical aspects as the prospects of introducing a visa-free regime between the EU and the EAEU, enhancing the mobility of pensions, fostering educational and academic exchanges, and the mutual recognition of diplomas. The workshop was attended by over 50 well-established academics and policy-makers from Europe, the United States, Turkey, Korea and the post-Soviet space. A new element of the workshop was the introduction of a high-level panel session. This session reflected on the long-term prospects of economic cooperation between the enlarged EU, the EAEU and their neighbors, including the key Asian players, such as China, Korea, and Japan, as well as the USA, focusing also on the labor market challenges and the impacts of migration flows on the sustainable development of the Greater Eurasian region. The session was chaired by Pavel Kabat and included talks by Tatyana Valovaya, Václav Klaus, Jeffrey D. Sachs and Péter Balás, as well as Evgeny Vinokurov, Peter Havlik and Jesus Crespo Cuaresma. Seminar Focus Areas: During the workshop the participants concentrated on three focus points: 1. The labor market and migration in the EU 2. The labor market and migration in the EAEU 3. Challenges and opportunities for a common EU-EAEU labor marke

Challenges and Opportunities of Economic Integration within a Wider European and Eurasian Space. Synthesis Report

Phase I has enabled assembling useful information and revealed important lessons. IIASA and its partner institutions take a long view regarding the EU-EAEU cooperation. In the current politically unfavorable circumstances, we have succeeded to bring together officials and experts from the EU, EAEU and neighboring countries in a constructive dialogue, seeking to prepare a mutually agreed ground for future initiatives, which, as soon as the political context improves sufficiently, will support transition to the implementation of the Lisbon-to-Vladivostok concept. This would be based on the science-based evidence concerning the rebuilding the damaged economic relations between the EU and Russia. Due to the sheer scope of related issues, the discussion on an anticipated agreement, or set of agreements, could be referred to as a “mega deal”. As the importance of various aspects is likely to be different for the two sides, the mutual concessions and compromises would be necessarily interconnected. In particular, due to its current prevailing export structure, the EAEU might be interested not merely in a free trade agreement per se, but in a comprehensive agreement with the EU, going beyond a pure FTA. It is probable that such a deep cooperation cannot be established in one step, rather it would be built gradually, in several stages. The deliberations of the initial screening discussions and preliminary policy ideas stemming from the series of IIASA workshops held during 2014–2016 covers the following domains: Methodology of assessing the economic impact of an EU EAEU integration agreement on its parties: We stress that it should necessarily go beyond estimating short-term direct trade effects extending to long-term and indirect effects, especially those related to the non-tariff barriers; proper estimation of the impacts of these will require a combination of contemporary analytical and modeling method Trade regimes: We provide a list of 20 potential domains of the EU EAEU ‘mega deal’ – from trade in goods to intellectual property; and make an argument, that in order to become mutually beneficial for all sides, this deal should go beyond a pure, traditional free trade area. Non-tariff barriers: We emphasize that the economic impacts of NTBs (technical standards, health and veterinary regulations, customs administration, etc.) can be very substantial, far exceeding the impacts of eliminating the remaining import tariffs. Energy: We suggest that there is a fundamental reciprocal interest in energy security for the EU and Russia. For the EU, this is supply security (source security, transit security, and fair and predictable prices); for Russia and Kazakhstan, this is demand security (financial and economic security, and fair and predictable prices; for transit countries – stability of revenues and supplies; for all, it is about environmental security and systemic resilience. Transport and infrastructure: We focus on the need to modernize and further develop the major Eurasian transport corridors (both road and railway) until 2030. As concerns infrastructure, we also stress the huge potentials of the development of common electric power markets, pipeline systems and trans-continental fiber-optic links. Adequate regulatory frameworks, security, and investments are key in both domains. Mobility of people: We argue for the facilitation of issuing visas and residence permits in order to ensure the mobility of businessmen, experts and professionals, the mutual recognition of qualifications. These steps can eventually lead to visa-free regime, large-scale academic exchanges, and the technical decision for the mobility of trans-border pensions. At the same time, we argue against prematurely raising the issue of the labour migration in the EU EAEU context. Another topic concerns the future of trade and economic relations between the EU, the EAEU and Ukraine, Moldova and Georgia, the three states that have already concluded AA/DCFTAs with the EU. The development of EU EAEU relations will require the opening of constructive negotiations on a fair trade policy between the three DCFTA signatory states and the EAEU, with the participation of the EU to ensure the compatibility of the EU EAEU cooperation deals with the respective DCFTAs

HIV Antigen Incorporation within Adenovirus Hexon Hypervariable 2 for a Novel HIV Vaccine Approach

Adenoviral (Ad) vectors have been used for a variety of vaccine applications including cancer and infectious diseases. Traditionally, Ad-based vaccines are designed to express antigens through transgene expression of a given antigen. However, in some cases these conventional Ad-based vaccines have had sub-optimal clinical results. These sub-optimal results are attributed in part to pre-existing Ad serotype 5 (Ad5) immunity. In order to circumvent the need for antigen expression via transgene incorporation, the “antigen capsid-incorporation” strategy has been developed and used for Ad-based vaccine development in the context of a few diseases. This strategy embodies the incorporation of antigenic peptides within the capsid structure of viral vectors. The major capsid protein hexon has been utilized for these capsid incorporation strategies due to hexon's natural role in the generation of anti-Ad immune response and its numerical representation within the Ad virion. Using this strategy, we have developed the means to incorporate heterologous peptide epitopes specifically within the major surface-exposed domains of the Ad capsid protein hexon. Our study herein focuses on generation of multivalent vaccine vectors presenting HIV antigens within the Ad capsid protein hexon, as well as expressing an HIV antigen as a transgene. These novel vectors utilize HVR2 as an incorporation site for a twenty-four amino acid region of the HIV membrane proximal ectodomain region (MPER), derived from HIV glycoprotein gp41 (gp41). Our study herein illustrates that our multivalent anti-HIV vectors elicit a cellular anti-HIV response. Furthermore, vaccinations with these vectors, which present HIV antigens at HVR2, elicit a HIV epitope-specific humoral immune response