Ben Aris in Moscow -

The reaction to Russian Prime Minister Vladimir Putin's plan to create a Eurasian Union was mostly scorn. Most of the would-be members don't even like each other very much, not to mention adding another layer of bureaucracy to an already Byzantine system. Yet the creation of a new union is almost superfluous, as commerce is running far ahead of policy: burgeoning trade is already tying the Eurasian region together tighter than politics could ever hope to do.

International trade has mushroomed as a result of globalisation, rising from the equivalent of 39% of global GDP in 1990 to 61% in 2010, and is expected to top 84% by 2030, according to a recent report by Citigroup. The value of this trade is also growing exponentially, rising from $37 trillion in 2010 and is expected to reach $149 trillion in 2030 and $371 trillion in 2050. That's a 10-fold increase in 30 years, the bulk of which will come from emerging markets.

Even before the western economies got into trouble, emerging markets were already proving to be as good export destinations as the more obvious developed world. Russia abruptly changed its mind about sending oil and gas to China in 2004, putting aside its traditional reservations about the Chinese Communist Party that have persisted since Stalin ran the show. At the same time, ballistic growth in developing Asia has bolstered trade across the region. And China has already become Brazil's biggest consumer of raw materials, with Africa not far behind. "We expect world trade to expand at an average rate of 7.1% per annum between 2010 and 2030 (measured in constant 2010 dollars) and to expand by 4.7% p/a between 2030 and 2050," say Citigroup's Ebrahim Rahbari and Willem Buiter. "What will be new is the prominence of today's emerging market economies in world trade? We expect intra-emerging market trade to overtake trade within the advanced economies by 2015 and to exceed trade between advanced economies and emerging markets by 2030."

Taiwan and Hong Kong pioneered the model of getting rich from making cheap goods that could be exported to the rich world in the 1970s, but this model is rapidly fading into irrelevance as intra-emerging market trading moves to centre stage. China is obviously leading the way and will overtake the US and the Eurozone as soon as 2015, predicts Citigroup, with a knock-on effect that will drive investment in all these countries.

Ten years ago, five out of the leading 19 emerging market economies sent 80% or more of their goods and services to developed markets; today, only Mexico is still so dependent on the developed world. Likewise, 12 of the major emerging markets sent 60% or more of their goods to developed markets a decade ago, but this is down to just eight countries now, according to Renaissance Capital. At the same time, only three emerging markets sent half or more of their goods to other emerging market countries in 2000, but that number has now reached eight out of 19 countries.