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The Eurasian Economic Union is a historic deal and represents a pivot to the East, global financial markets expert Patrick Young told RT. The new union will force the EU to be more competitive and will be a wake-up call for US.

On Thursday, Russia, Belarus, and Kazakhstan signed the Eurasian Economic Union which will come into effect in January 2015. The new bloc will cut down trade barriers and comprises of over 170 million people, making it the largest common market in the former Soviet space.

RT: Just how big a deal is this?

Patrick Young: This is a very interesting deal. It is one huge step, part of the pivot to the East that Russia has been behind, and of course we have seen in recent weeks really come together. Think about it this way — amongst these three countries alone in the customs union they’ve had over the last few years they’ve increased their trade between themselves by the equivalent of the entirety of Russia’s trade with the US. It has multiple possible impacts - some possibilities for every business, small and large, whether you are sitting in Minsk or Almaty, or wherever you are in Russia to profit from the opportunity. Eurasian economic union is a new power-trading bloc. It has many resources, a huge number of people. We are talking about 170 million people - 1.5 percent of the world’s population. They are covering thought 15 percent of the world’s land, 20 percent of the world’s gas resources, 15 percent of the world’s oil resources and a great deal of industry and also agriculture.

RT: Europe is Russia’s biggest trading partner at the moment, should it be worried?

PY: Europe has to start looking at things from the competitive sensible perspective. Europe was not going to be the only union in the world, just as the same as NAFTA in America was never going to be the only trade agreement there. Europe needs to understand the idea that just because you happen to be on the eastern fringes of the European Union, it doesn’t automatically mean that you are going to try to fight your way into the EU as it currently is. Why not go with something like this Eurasian union, where you’ve got effectively all the benefits of the first stage of the European economic community, i.e. free trade, but you don't have to worry about the silly regulation, plutocratic red tape, which plunged the EU community into crisis.

RT: What impact will this have on US economy?

PY: This is a high wake-up call. This is part two or part three for the US over the course of the last few weeks. Obviously the gas pipeline deal – that was the whole pride of Siberia project – was absolutely fascinating. The point about whether America needs to get worried is:

a) America needs to realize that just because it is the world’s largest economic power; it is no longer the uni-power in the world in terms of economics. Russia and the rest of the world have alternatives in how they trade.
 b) And the most significant thing - and this is a very long-term trend for the US - is that none of it will be conducted in US dollars. People will find another way to trade. That is a big impact because the US dollar reserve currency status is the thing whereby it is the most dominant money on Earth ultimately is under threat. As soon as US dollars are under threat, the hegemony of the US project is going to find itself in problems. This is a big pivot and the US ignores it at its peril long term.