Will Iran join Eurasian Economic Union?

Iran wants to join Eurasian Economic Union

Will Russia allow it?

There are some good reasons for Moscow’s lukewarm response to the possibility of Tehran’s admission to the EAEU. What are factors for and against Iran joining Eurasian Economic Union from Russian point of view?

By NIKOLA MIKOVIC

The Russia-dominated Eurasian Economic Union might soon be acquiring a new member: Iran. Boxed in because of its rivalry with other states in the Middle East, and laboring under US-imposed sanctions, Tehran believes it needs to strengthen ties with such neighbors as might be willing to accept it.

Iran appears to think that membership in the EAEU is a done deal. That is despite officials of the bloc denying they had received any formal request. When Mohammad Baqer Qalibaf, Speaker of the Iranian parliament, visited Moscow on February 10, he declared Iran would “permanently join the EAEU in two weeks.” Apart from the fact that the date has passed, such optimism is extremely premature.

The response from Mikhail Myasnikovich, chairman of the board of the Eurasian Economic Commission, was telling. The Eurasian union wants Iran to have “a special view on cooperation with Eurasia,” he said. It hardly sounds like a warm welcome. Other EAEU officials have stressed that Iran must formally apply for membership. A veiled warning, perhaps, that Iran cannot expect to bypass procedures.

On the face of it, there are reasons for Tehran and Moscow to support Iran’s inclusion into the bloc. The economic area is an integrated market of 180 million people with a combined GDP of more than US$5 trillion. It encourages the free movement of goods and services and can formulate common policy in key areas such as energy, agriculture, transport, customs, and foreign trade and investment.

Iran already has had a free-trade agreement with the Eurasian union since 2018. In 2020, trade turnover between Iran and the EAEU increased by 2%, exceeding $2 billion.

Mutual benefits

Food products and agricultural raw materials accounted for most of that trade in both directions. 80% of the goods that the EAEU supplied to Iran and 68% of what Iran sent to the EAEU.

Joining the EAEU would improve Iran’s economic and political position globally and help to offset, at least partly, the cost of US sanctions.

On the Russian side, Moscow wants another pathway to the markets of the Middle East. That is why the Kremlin strongly supports the construction of the Nakhchivan corridor. It is a land route connecting not only Azerbaijan to its Nakhchivan exclave between Turkey and Armenia, but also Russia and Turkey and – crucially – Russia and Iran.

A future rail link between Russia and Iran, passing though Azerbaijan and Armenia, will undoubtedly enhance economic ties between the two countries as well as Iran’s trading relations with other Eurasian union member states.

However, how receptive Arab Middle East states would be to Russian goods transiting through Iran is another question altogether. This might be a reason for Moscow’s distinctly lukewarm response to the possibility of Tehran’s admission to the bloc.

In fact, there are several large questions hanging over inducting a new member into the bloc. Bloc consists of Armenia, Belarus, Kazakhstan and Kyrgyzstan, in addition to Russia. Uzbekistan, Moldova and Cuba have observer status.

Impact on Russian relationship with Israel and Arab States

It is not improbable that closer economic ties would lead to stronger military ones. The UN Security Council embargo on conventional arms shipments to Iran expired in October. It is no secret that Iran is interested in purchasing Russia’s S-400 anti-aircraft system. As well as Su-30 fighter jets. But such a deal would almost certainly ramp up tensions between Moscow and Washington and raise alarm bells in Gulf Arab states.

Then there is Russia’s relationship with Iran’s arch-enemy, Israel. The Russians have not prevented Israel from striking at Iranian targets in Syria, despite operating S-400 units in the area. Russia was the mediator in a prisoner exchange between its ally, Syria, and Israel that took place this month and there are rumors of further ongoing negotiations on humanitarian issues and even on wider geopolitical matters.

Speculation aside, what is known is that Israeli Prime Minister Benjamin Netanyahu and Russian President Vladimir Putin discussed continued coordination between their two countries in light of developments in regional security. Was Iran also on the agenda?

Moscow, after all, must maintain its own delicate balancing act and guard its geopolitical interests. The normalization of ties between Israel and the United Arab Emirates and other Arab states has changed interest-dynamics in the region, tilting the balance further toward the Arab Gulf region’s anti-Iran alliance. How does Russia profit from the new Middle East?

Some other countries are already in the queue to join

Finally, there is the fact that there are others ahead of Iran in the queue to join the Eurasian union. Syria is one of them; 40 other countries also have stated their wish to develop trade and economic cooperation with the bloc.

As well as declaring that Iran would soon join the EAEU, Qalibaf said he had brought “a very important message” from Supreme Leader Ali Khamenei. It may well be that Moscow is composing its own, equally important message to send back to Tehran.

NIKOLA MIKOVIC

Nikola Mikovic is a political analyst in Serbia. His work focuses mostly on the foreign policies of Russia, Belarus and Ukraine, with special attention on energy and “pipeline politics.” 

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