The inter-agency working group is comprehensively exploring the issue of possible accession to the Eurasian Economic Union (EAEU), the Minister of Economic Development and Trade Zavqi Zavqizoda told reporters in Dushanbe on July 14.  

“Based on the conclusion of the inter-agency working group, the Government will take a final decision,” the minister said.

At the same time, he noted, “We are already cooperating very closely with the EAEU member nations in various formats.” 

He, in particular, noted the regular growth of Tajikistan's bilateral trade with the EAEU member countries.

According to official statistical data, the EAEU member nations (Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia) over the first five months of this year have accounted for 43.2 percent of Tajikistan external trade turnover.  Over the reporting period, Tajikistan has traded with these countries for a total of almost 1.2 billion US dollars.   .

Over the same five-month-period, the two-way trade with Russia, Kazakhstan and Belarus has increased by 46.2 percent, 19.2 percent and 50 percent, respectively.  Meanwhile, the bilateral trade with Armenia and Kyrgyzstan over the reporting period has decreased by 78.8 percent and 63 percent, respectively.  

The Tajik authorities have been exploring the feasibility of accession to the EAEU for already eight years.  Meanwhile, experts say Tajikistan remains outside the EAEU by mutual desire.  

The Tajik authorities reportedly fear that local relatively large producers, which are in one way or another connected with the country’s political elite, will not be able to compete with producers manufacturers from the EAEU member nations after opening of customs borders and will go bankrupt.

The EAEU member nations, for their part, caution that the low level of the Tajik economy may negatively affect the Unions economy as a whole.  

The Eurasian Development Bank (EDB)’s analysts have assessed the economic effects of Tajikistan’s possible accession to the Eurasian Economic Union (EAEU).  According to them, the main advantages of the country’s possible joining the EAEU are expected to materialize in the following areas: realization of the advantages of the common labor market, the EAEU; and development of the country’s trade and investment potential.  The authors estimate that the annual growth rate of the nation’s economy may increase by up to 3 percentage points.

Meanwhile, an analytical report released by the Eurasian Development Bank (EDB) on November 23, 2020 notes that the high level of current trade integration with EAEU countries is one of the key prerequisites for Tajikistan’s accession to the Union.

Economic Effects of Tajikistan's Accession to the Eurasian Economic Union says the share of mutual trade was 39% in 2019, which is higher than in many current EAEU member states. 

EDB experts, however, emphasize that the key driver for Tajikistan’s development in the event of its possible integration with the EAEU will be the advantages associated with the single labor market.   Tajikistan has so far been unable to recover to the level of 2014.  Should the country join the Eurasian Economic Union, the EDB estimates that not only remittances can be expected to grow, but also the wages of migrants – by an average of 10-30%.  All these changes may stimulate additional accumulated remittances of US$1.3-1.5 billion within five years of the country’s joining the Union.

According to the report, Tajikistan’s accession to the Eurasian Economic Union may also be conducive in the medium term to simplifying the rules of doing business, and to creating more favorable conditions for attracting direct investments.

The report says institutional improvements are a priority that can offset the costs of Tajikistan’s accession to the EAEU and ensure the realization of the trade and investment potential of cooperation.  EDB experts say the effects of Tajikistan’s possible accession to the Eurasian Economic Union will be achieved as fully as it is possible to remove or reduce structural constraints.  These reportedly include a favorable institutional regime, transport routes, secured access to markets, and development of the water and energy sector.  In addition, Tajikistan’s possible integration with EAEU countries might need to be considered in the wider context of developing the economic potential of cooperation throughout the Central Asian region.  A comprehensive approach to water use and transport connectivity across the region can significantly enhance the economic impact of cooperation.

In spite of the mentioned significant benefits, the Tajikistan’s possible accession to the EAEU is reportedly also associated with some short-term costs.  Potential disadvantages include a possible reduction in trade turnover with third countries, the risk of losing sources of financing for economic development, as well as challenges associated with bringing the national legal framework in line with Union requirements.

A comprehensive analysis of the benefits and costs of Tajikistan’s possible accession to the Eurasian Economic Union, as presented in the EDB’s report, suggests that this may have a significant positive effect on the country’s long-term development.  The increase in the annual growth rate of Tajikistan’s economy may reach up to 3 percentage points, boosted by enhanced investment, job creation, and involvement in the production of new labor resources, as well as improved productivity as a result of technology transfer and the positive impact of accession on the institutional environment. In addition to economic growth, Tajikistan’s accession to the Union will contribute to macroeconomic stability – inflation is expected to stabilize at 5% and the debt-to-GDP ratio to decrease by 5-8 percentage points.  In addition, the country’s joining the EAEU may result in an improvement of its sovereign rating.

The Eurasian Economic Union (EAEU) is an economic union of states located primarily in northern Eurasia.  A treaty aiming for the establishment of the EAEU was signed on May 29, 2014 by the leaders of Belarus, Kazakhstan and Russia, and came into force on January 1, 2015.  Treaties aiming for Armenia's and Kyrgyzstan's accession to the Eurasian Economic Union were signed on October 9 and December 23, 2014, respectively.  Armenia's accession treaty came into force on January 2, 2015.  Kyrgyzstan's accession treaty came into effect on August 6, 2015.

The Eurasian Economic Union has an integrated single market of 183 million people and a gross domestic product of over 4 trillion U.S. dollars.  The EEU introduces the free movement of goods, capital, services and people and provides for common transport, agriculture and energy policies, with provisions for a single currency and greater integration in the future.

The Union operates through supranational and intergovernmental institutions.  The Supreme Eurasian Economic Council is the “Supreme Body” of the Union, consisting of the Heads of the Member States.  The other supranational institutions are the Eurasian Commission (the executive body), the Eurasian Intergovernmental Council (consisting of the Prime Ministers of member states) and the Court of the EEU (the judicial body).