TWO IN ONE

The EAEU and CIS summits in St. Petersburg, Russia were not routine events for many reasons. Firstly, because they took place amid the unprecedented geopolitical tensions and continuing aggravation in relations between the leaders of individual post-Soviet states. Yet, it was clear that state delegations, driven by common interests, remain focused on dialogue, considering it the only possible effective means to resolve current problems.

New figure-head

On December 25, St. Petersburg hosted yet another summit of the Eurasian Economic Union (EAEU). It was attended by the heads of all the member states, including Armenian Prime Minister Nikol Pashinyan, who in recent months has literally ignored events organised and attended by the Russian leadership.

This time, apparently due to the exceptional nature of the event for Yerevan, Pashinyan nevertheless broke his own taboo. In fact, Armenia has been chairing the EAEU since 2024. In addition, a free trade agreement between Iran and the EAEU was signed at the summit. And Armenia is the only member state of the union with a land border with Iran. Unlike the temporary free trade zone effective since 2019, 90% of all items and more than 99% of supplies from the EAEU countries will be subject to duty reduction. For Iran, this will be the first such deal.

Since Armenia is not under sanctions like Russia and Iran, the movement of goods in the free trade zone provides Yerevan with certain preferences as a bridge, as they like to call it in Yerevan, between the EAEU and Iran. In addition, it is also a convenient platform for redistribution of services and goods, especially from the sanctions lists.

In 2022, the trade turnover between Armenia and Iran saw a significant increase of 41% from the previous year, surpassing $700 million for the first time. The same year, trade between Armenia and Russia reached a substantial $5 billion. Fast forward to 2023, within just ten months, this figure has already hit $5.4 billion, breaking the previous year’s record with a 40.8% increase compared to the same period last year. A large portion of these numbers can be attributed to the surge in trade of sanctioned goods. Re-exportation has proven to be a lucrative venture for Armenia.

This evolving situation presents an opportunity for not only escalating foreign trade volumes and, as a result, re-exports, but also for significantly enhancing economic performance.

Fearing an angry reaction from Armenia's Western partners, Nikol Pashinyan emphasised in his keynote speech in St. Petersburg that "the EAEU should not have a political and geopolitical agenda". Obviously, he made it clear that for him participation in the union with Russia is just a profitable economic project. Moreover, he even stated that Armenia "seeks to suppress all attempts to politicise Eurasian integration". Since the rest of the world associates such attempts with Russia, Pashinyan's statements may seem to hint that Yerevan will continue to fight the politicisation of the organisation during its chairmanship.

Between the EAEU and the EU

The EAEU is an economic institution based on the idea of integrating the economies of its member states by creating a common market for goods and services. The EAEU has governing bodies to which the parties delegate certain powers.

Yet, the EAEU is not a marketplace limited to simple purchase and sale operations only. As in any such institution, it has principles and rules governing the relations of the member states between each other and external markets. One of the most important documents adopted by the EAEU is the Customs Code, which also means a kind of political commitment. Thus, Pashinyan's attempts to present Yerevan's participation in the EAEU as non-binding, solely for taking the advantage of basic trade freedoms sound not credible.

In October, speaking at the plenary session of the European Parliament in Strasbourg, Pashinyan said that Yerevan was ready to co-operate with the EU and become closer to this union as far as they consider it possible.

At the same time, there are bilateral agreements in place which determine the limits of Armenia's cooperation with the EU. Thus, Yerevan cannot be any closer to the EU than the countries applying for membership in the union, as they do not have any commitments to other integration associations.

For example, Moldova chose membership in the EU over joining the CIS. Armenia does not officially intend to join this organisation and does not hint at its withdrawal from the EAEU or the CIS, although Armenian leaders increasingly talk about their closeness to Europe while not reducing the pace of integration into post-Soviet associations.

The declaration adopted at the end of the summit on December 25 demonstrates this clearly. The document outlining the future development of the union until 2030 and extending to 2045 encompasses six key areas. These range from ensuring the market is fully supplied with all necessary goods and services, to positioning the EAEU as a significant economic magnet on the global stage. In response, Yerevan has affirmed its commitment to deepen economic integration with Russia and other EAEU nations, with clearly defined timelines and institutional parameters.

Reluctant friends

As for the unplanned meeting between Putin and the Armenian Prime Minister, it was not initially scheduled according to Russian leadership representatives. However, the possibility of the two leaders crossing paths at the event was not ruled out. In simpler terms, the Russian side did not arrange a separate meeting with Pashinyan, likely due to a perceived lack of necessity, indicating a continued period of strained relations between the two leaders.

Following Armenia’s ratification of the Rome Statute provisions, Pashinyan notably abstained from attending the Commonwealth leaders’ meeting in Bishkek. Despite this, Putin did not dismiss the potential for a future meeting with him. As circumstances would have it, the Armenian Prime Minister was compelled to travel to St. Petersburg, providing Putin with an opportunity to underscore Yerevan’s strong reliance on Moscow.

Regarding personal interactions between the two, it is known that Putin conversed with Pashinyan during a tour of the Peter and Paul Palace. Whether Putin expressed any dissatisfaction with the Armenian leadership’s actions remains speculative. The Belarusian leader, on the other hand, was more forthright, possibly echoing his Russian counterpart’s sentiments when he expressed doubt over Western countries’ willingness to assist Armenia.

"Who's going to help them? Europe and France are trying to do something. You see what is happening in France. They should sort things out in their own country and then go to the Caucasus and try to do something there. They can't sort things out in their own country. Armenians see that," believes the Belarusian leader.

CIS perspectives

During the summit, the informal dialogue between Azerbaijan’s President Ilham Aliyev and Armenia’s Prime Minister Pashinyan drew public attention. While no significant outcomes were anticipated from this dialogue, the first meeting between the two leaders in six months, where they discussed the peace agenda, was viewed as a positive indicator potentially influencing the negotiation dynamics between Azerbaijan and Armenia in the near future.

The Kremlin also positively evaluated the meeting between Aliyev and Pashinyan, with Russian presidential spokesman Dmitry Peskov stating Russia’s readiness to aid Baku and Yerevan in finalising the peace treaty. It is plausible that Moscow anticipates the peace treaty to be signed in the Russian capital, although it may not be averse to its conclusion in a neutral location under the current circumstances.

Overall, the CIS summit addressed the international agenda and the impact of ongoing global processes, primarily the Russia-West confrontation, on Commonwealth countries. This rivalry is particularly palpable in the South Caucasus, manifesting mainly in the competition between Russia and Western mediators for the status of the primary negotiation platform in the region.

At the present negotiation stage, Moscow proposes mediation in finalising the peace agreement text. Concurrently, it is known that the next meeting between the Foreign Ministers of Azerbaijan and Armenia to finalize the peace agreement’s “outline” will take place in Washington.

The Russian side cannot prevent this, but the CIS summit was a convenient opportunity for the Russian president to exchange views with his Azerbaijani and Armenian counterparts on this process and the current interests of the parties. 

As for the general agenda, the Russian-Ukrainian war continues, and with it comes the tightening of Western sanctions against Russia. Under these circumstances, Moscow is interested in maintaining close contacts with the CIS countries, as they are a corridor to the outside world.

Since Moldova announced its intention to finally leave the CIS on the eve of the summit, the Asian agenda is becoming dominant in the organisation. For Russia, this means that its strategy of turning to the East now has an institutional basis in the CIS. Soon we will see the shape of this transformation within the organisation.