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Executive Summary

On May 15, 2025, the Islamic Republic of Iran formally joined the Eurasian Economic Union (EAEU) as a full member and free trade partner. This move was labeled by the Islamic Republic as a milestone for Iranian economic policy. It is widely known that the brunt of international economic sanctions is borne by the Iranian people. However, the ethical issues surrounding Iran’s membership in the EAEU cannot be ignored, regardless of the potential economic benefits to Iran, most of which are controlled and reaped by loyalists to the regime. As Iran opens its markets more deeply to Russia and other EAEU member states, we must acknowledge that yet again, human rights are being pushed to the side in the name of political and economic benefit. While members-only circles such as trading blocs can be hard to influence, it is not impossible to do so; human rights advocates would benefit from integrating discussion of international trade dynamics within their advocacy and analysis. 

Background

The EAEU was formally established on January 1, 2015 by Russia, Kazakhstan, and Belarus through the entry into force of the Treaty on the Eurasian Economic Union. Armenia and Kyrgyzstan became members later in 2015. Its goal is to create a regional economic bloc that allows for the free movement of goods, services, and labor among its members. This bloc operates under a shared customs code and common external tariff, which gives it significant economic leverage. With over 183 million people and a $2 trillion economy, the EAEU gives its smaller, weaker and heavily sanctioned members access to larger trade opportunities and economic protection beyond the reach of the West.

Iran and the EAEU

Iran’s engagement with the EAEU began in 2018 with the signing of a Preferential Trade Agreement (PTA), which took effect in October 2019. Although sometimes mislabeled as a full Free Trade Agreement, the 2019 deal was limited in its scope. The PTA reduced tariffs on 502 product lines from Iran and 360 from the EAEU, with a focus on agricultural goods, metals, and some manufacturing. According to Vienna Institute for International Economic Studies economists Adarov and Ghodsi, Iran reduced average tariffs on EAEU-manufactured imports from 22.4% to 15.4%, and on agricultural imports from 32.2% to 13.2%. In return, the EAEU dropped tariffs on Iranian agricultural goods from 9.6% to 4.6%, and on manufactured goods from 8% to 4.7%.

Although the PTA covered only about 55% of members’ total trade with Iran at the time, its implementation set the stage for Iran’s government to integrate its economy deeper within the bloc. In 2023, a comprehensive Free Trade Agreement was finalized and was ratified by the Iranian Parliament by February 2025. As of May 15, 2025, the agreement was ready for full implementation. The new agreement expands tariff exemptions to over 90% of goods traded between Iran and the EAEU.

Economic Implications

The economic implications of this agreement are substantial. Based on the Vienna Institute for International Economic Studies’ gravity model, the PTA is expected to boost mutual trade by nearly $46 million, increasing EAEU exports to Iran by 9.7% and Iranian exports to the EAEU by up to 4%. This gap reflects Iran’s relatively higher tariffs, making cuts more beneficial for EAEU exporters. Most gains are in chemicals, agriculture, and metals. Iran is likely to increase exports of fruits, vegetables, and polymers, while importing more grain, livestock, and machinery. Russia is projected to gain over $26 million in new exports, with Armenia and Kazakhstan also seeing large increases. 

Beyond numbers and trade figures, the agreement also holds broader significance. Iran is not a full member of the WTO and has only observer member status, limiting its ability to benefit from the world’s foremost global trading bloc. Iran’s membership in the EAEU helps the Islamic Republic to bypass international economic sanctions, lessening their impacts, and strengthening its ties with Eastern markets. Forty years of experience with the Islamic Republic have shown that when economic benefits reach Iran’s doorstep, the Islamic Republic and its ideologically faithful are primed to extract the most benefits, rather than the ordinary people of Iran. For the EAEU, the agreement boosts its role as a counterbalance to Western influence and gives its members better access to Iran’s energy sector.

Bypassing Human Rights

The Vienna Institute for International Economic Studies report points out that even after the agreement, Iran’s tariffs are “still much higher than the tariff applied by the EAEU.” This imbalance reflects Iran’s protectionist and state-controlled economy, permitting the Islamic Republic to gain more power from EAEU membership without being held accountable for any human rights violations. In all countries, economic, political and social circumstances do not exist in isolation from one another. Oppressive regimes, such as those in Iran and China, will always use economic benefits to further cement their authoritarian control. The Islamic Republic will use its EAEU membership to further strengthen its grip over Iran’s economy, and continue to prevent the free market behavior and civilian economic participation that would undoubtedly erode the regime’s authority. 

Thus, Iran’s membership in the EAEU highlights a major deficiency common to most economic trading blocs, one which is critically harmful in the case of the Islamic Republic’s control of Iran: the absence of any human rights considerations. The Islamic Republic occupying Iran continues to crush dissent, silence protests, and enforce harsh gender discrimination. The 2022 killing of Mahsa Amini sparked the “Woman Life Freedom” movement and global outrage, but Iran’s trading partners have largely refrained from voicing any support for Iranian civilians living under a brutal regime. Human rights groups and advocates warn that trade agreements such as the one granting membership to Iran in the EAEU prop up oppressive regimes by giving them economic support while turning a blind eye to human rights, political and social reform. 

Influencing the EAEU from the Outside

Infiltrating a members-only trading bloc with outside demands of the Islamic Republic is not a direct possibility, given that trading blocs not only are meant to foster trade, but also to shield members from external forces. But indirectly, countries like the United States, which seeks closer ties with EAEU members Armenia and Kazakhstan, can use soft leverage and incentives to influence how Armenia and Kazakhstan engage with Iran within the EAEU framework. 

For example, the U.S. and Armenia recently concluded in January 2025 the “Charter on Strategic Partnership Between the United States of America and the Republic of Armenia” (the Charter), which intends to build U.S. and Armenian cooperation on justice sector reform and human rights, combat the proliferation of weapons of mass destruction, foster stability in the South Caucasus, strengthen enforcement of export controls for dual-use goods, enhance Armenia’s energy security and efficiency, and better integrate Armenia into global markets. On its face, therefore, the Charter undercuts the advantages of the EAEU and can draw Armenia closer to the West rather than reliance on a trading bloc dominated by Russia. The timing of the Charter also is worth noting; Armenia joined the EAEU in 2015, but the Charter was concluded only in the wake of the Russia-Ukraine War and burgeoning of the Islamic Republic as a global arms dealer, signaling the West’s keen eye on methods to outmaneuver these oppressive regimes. 

Conclusion

Entry into a regional trading bloc typically is a strategic win for any government. But in the case of Iran, a country ruled by a brutal theocracy and economically decimated for over four decades, its entry into the EAEU gives the Islamic Republic a fresh boost of leverage to retain economic control over Iran, continue its human rights violations, and stifle economic opportunity for everyday Iranians. Accountability and human rights are on the losing end of the struggle when regimes like the Islamic Republic can turn to regional trade to avoid Western sanctions and increase their political leverage. If agreements like this become the norm, economic power instead of democratic values will continue to shape who has a seat at the global table. However, countermeasures are available to invite, entice and attract trading bloc members in other directions. Human rights proponents in Western countries would be well served to include topics such as strategic positioning vis-á-vis the EAEU into their human rights advocacy.