0848 GMT February 24, 2020
The EEU, whose members are Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan, has earlier negotiated free trade agreements with Vietnam and China, TASS reported.
"Iran has become a partner of a great economic union. The agreement will bear positive fruit for the whole region," said Iran's Minister of Industry, Mine and Trade Mohammad Shariatmadari.
Shariatmadari said that his country, which exports goods worth $20 billion per year, is a good partner for the EEU and "is interested in the simplification of export procedures, the elimination of trade barriers and the establishment of stable economic and trade relationships".
The chairman of the board of the Eurasian Economic Commission, Tigran Sargsyan, hailed the agreement signed by Iran and the EEU, which he portrayed as "the first step toward establishing a new type of economic relationship" between the parties.
"The Iranian market is very large and dynamic and that is why it is so appealing to our business leaders," he said.
"Of course we are worried, but we have our own economic interests and we will attempt to implement all of the terms of the agreement," Sargsyan said.
According to Rakhim Oshakbayev, the director of the Talap Center and a Kazakh political scientist who specializes in studying the EEU, "the agreement between Iran and the EEU was to be expected and is a consequence of the withdrawal of the United States from the Iran deal".
"I think this is positive and it would mean that the foreign policy of the United States is not completely effective," he said.
The political scientist, however, believed that it is possible that Kazakhstan might propose adjustments to the agreement with Iran if sanctions were imposed by the administration of US President Donald Trump.
"We have a bilateral relationship and we have signed bilateral agreements, but I think changes are possible because I do not believe that Kazakhstan will go against US policies," Oshakbayev said.
"Kazakhstan will try to avoid US sanctions. If the United States says that working with these companies will lead to sanctions, we (Kazakhstan) will avoid, in my opinion, working with Iran despite these high-level agreements with the EEU," he added.
The trade agreement between Iran and the EEU follows the central principles of the World Trade Organization.
The bloc was established in 2015, after it superseded the Eurasian Economic Community that functioned from 2000 to 2014. The union has an integrated single market of 183 million people and a gross domestic product of over $4 trillion.
Armenia also welcomed the free trade agreement between the EEU and Iran. Armenia, the only EEU member state in the Caucasus, has been positioning itself as a trade partner to Iran via a free trade zone on its southern border.
Armenia's recently elected Prime Minister Nikol Pashinyan was quick to applaud the deal, describing it as a boon for Armenia. "We hope that it will stimulate our commercial ties [with Iran,]" he told reporters. "It opens up opportunities. We hope to utilize those opportunities in full."
Armenian Minister for Economic Development Artsvik Minasian said the deal would allow Armenia to serve as an important transit route between Iran and the wider EEU market. "This is also an opportunity to manufacture some products in the Meghri free-trade zone," he told Azatutyun, Armenian news service.
Meghri, Armenia's border town with Iran, has become an important part of Armenia's economic strategy after a trade hub has opened there in December. The hub offers generous business terms for companies operating there.
"Companies operating in the Meghri will be exempt from profit tax, value added tax, excise tax and customs fees," the provincial governor's press secretary, Vazgen Sagatelyan, told Eurasianet recently.
"We expect the zone to attract 50 to 70 companies in the coming years, investing $100-130 million and creating more than 1,500 jobs."
Trade between the two countries is still modest, reaching a record $263 million by the end of last year.