Eurasian Economic Union at 10:
Between goals and realities

The year 2025 marks the 10th anniversary of the commencement of the Treaty on the Eurasian Economic Union (EAEU), a cornerstone of economic regionalism in the post-Soviet space. The EAEU aims to create a common market for goods, services, capital and labor for its member states – Russia, Belarus, Armenia, Kazakhstan and Kyrgyzstan – while coordinating policies to strengthen its collective framework. The progress is evident and institutional mechanisms are well developed; however, it has been tempered by challenges to the implementation of treaty goals.

From declarations to institutional foundations

The EAEU’s roots trace back to the dissolution of the Soviet Union in 1991. The Commonwealth of Independent States (CIS), formed in December that year, aimed to foster cooperation among former republics, with ambitions for a common economic zone. However, the CIS prioritized dialogue over integration.

In 1994, Kazakhstan’s then-President Nursultan Nazarbayev proposed a Eurasian Union, envisioning a supranational body to create “a common economic zone and ensure  a joint defense policy.” This led to negotiations from 1995-2000 to establish a customs union among Russia, Belarus, Kazakhstan, Kyrgyzstan and others, though resulting declarations remained largely aspirational.

By 2003, Russia, Belarus, Kazakhstan and Ukraine agreed to form a common economic zone. But Ukraine’s geopolitical shift after 2004 stalled its participation. In October 2007, Russia, Belarus and Kazakhstan signed an agreement to establish a shared customs territory, which was initiated in 2010 when customs codes and technical standards were introduced. From June 2011, customs control at the borders between the member states was terminated. Kyrgyzstan joined in 2012.

Russia, Belarus and Kazakhstan formalized the EAEU treaty, which replaced the customs union, in May 2014, with Armenia and Kyrgyzstan acceding later that year. It became operational in January 2015.

Over the past three decades, these states have progressed from intentions for a customs union into creating an economic union. Today, the EAEU functions as an evolving institutional entity with common goals and visions.

The bloc is equipped with a broad institutional structure to support its goals. Its bodies include: the Supreme Economic Council – the highest level consisting of heads of states; the Eurasian Intergovernmental Council – the council of heads of governments; the Eurasian Economic Commission – the executive body; and even its own court.

The decisions taken by these bodies provide a sense of the depth of integration efforts. For example, last year, the Supreme Economic Council adopted key decisions, such as creating a common gas market, approving court fees for businesses and amending the plan for a common electricity market. Another notable decision caps state aid for Belarus’s agricultural sector at 10 percent until 2030.

The development strategy for the EAEU through 2025, adopted in 2020, outlines over 300 measures to advance its objectives, including completing the formation of a common market, enhancing regulatory efficiency, digitizing trade processes, streamlining customs procedures and fostering sector-specific cooperation, to move toward becoming a more integrated market.

EAEU economic integration and hurdles

The organization’s official website lists one barrier, 35 limitations and 33 exemptions. A barrier is identified as an obstacle to the seamless flow of goods, capital, services and labor caused by the inconsistency of current legislation or legislation that has been adopted but is not yet in force. Limitations vary in nature: They exist where the common market is recognized by the EAEU but does not operate due to a lack of regulatory mechanisms within the organization.

Exemptions are carve-outs from the single market, officially agreed upon by the members, to protect human life and health, social morals, law enforcement, the environment and other important reasons.

A barrier or limitation must be approved by the commission to be included in the official portal. This approval is initiated either by a submission from a member state or any individual or entity within a member state, leading to an official review and decision. In the case of a barrier, the decision means that the member state with the barrier must implement an EAEU treaty or a decision by the commission to remove it, and failure to do so constitutes a breach of an existing agreement. To address limitations, a regulatory framework needs to be established.

The only barrier officially recognized is Belarus’s requirement for veterinary permits and certificates for the export of animal farming products from Russia to Belarus.

Current limitations include a non-existent common market for electricity, gas and oil. Additionally, there is a lack of market pricing mechanisms for gas and unequal access to transportation networks for gas and oil. The lack of effective regulation to enforce the technical standards adopted by the union, as well as adequate dispute resolution processes, also stands out.

Other areas involve the absence of harmonization in accreditation, inconsistent rules governing the exchange of food supplements, and restricted access for ships from member states to the internal waters of others. Furthermore, there are notable differences in excise tax structures and in government regulations for aviation services, as well as a lack of mutual recognition of electronic signatures and driving licenses for business use.

Being included in the official list of limitations indicates that the organization has identified these areas as needing a new regulatory framework.

In 2018, there were 65 obstacles in total, with 11 barriers, 37 limitations and 17 exemptions. Between 2022 and 2025, 19 barriers were removed such as prioritizing local goods in Kazakhstan’s government procurement, accreditation demands for branches and representative offices of member-state legal entities, and issuance of conformity certificates in Russia.

The EAEU’s registry on barriers and limitations notably does not list any restrictions on the free movement of people. Currently, citizens of member states can work in EAEU countries without a visa or special permit, and employers do not need a permit to hire a foreign worker. In Russia, the largest market for migrant workers within the union, registration with the migration authorities is required for work. An employer who hires citizens of an EAEU member country must register with the police.

Given this framework, the movement of labor is active within the economic bloc. For instance, by the end of 2024, in Russia, over 360,000 economic migrants from Kyrgyzstan were registered, a significant figure for a country with a population of 7 million. Remittances from this diaspora accounted for more than 15 percent of Kyrgyzstan’s gross domestic product last year.

The EAEU’s treaty grants the right for an entity of one member country to provide services in another country without establishing a legal entity there, while also ensuring mutual recognition of permits and qualifications. However, significant limitations persist in the single market for services. The EAEU single market for services encompasses only 142 of the 942, or just 15 percent, of the service sectors classified by the United Nations Secretariat’s Central Product Classification. These sectors include retail and wholesale trade, shipping and transportation agencies, franchising and services in agriculture and forestry. Until 2021, the common market for services was valued at slightly over $8 billion, reflecting a decline from 2019 levels.

The EAEU labor market is rather successful in facilitating the movement of workers. The market for goods is expanding while the services market − particularly financial services − is still fragmented due to regulatory barriers among member states. Institutional mechanisms are in place that identify and deal with obstacles to the single market.

Economic integration still progressing

In December 2023, participating countries adopted the “Eurasian Economic Path” declaration, which has goals such as fully eliminating barriers and reducing the many exemptions and limitations on trade within the union by 2030. It also outlined a host of priority areas such as food and agricultural processing, energy resources and online trade. Other goals involve the support of small and medium-sized enterprises, bolstering environmental protection, establishing a common commodity exchange market, promoting technological cooperation, creating a shared transport and logistics space and unifying member states’ financial markets.

Further, the EAEU aims to enhance its global image and serve as an economic hub by positioning itself as a center of integration in the Great Eurasian Partnership and expanding trade agreements and cooperation with other nations.

This report was originally published here: https://www.gisreportsonline.com/r/eaeu-goals-realities/