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The Impact of Eurasian Economic Union Membership on Mutual Trade in Services: What Are the Challenges for Small Economies?

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  • Davit Hakhverdyan

    (AMBERD Research Center, Armenian State University of Economics, Nalbandyan 128, Yerevan 0025, Armenia)

  • Ruzanna Tadevosyan

    (AMBERD Research Center, Armenian State University of Economics, Nalbandyan 128, Yerevan 0025, Armenia)

  • Anna Pakhlyan

    (AMBERD Research Center, Armenian State University of Economics, Nalbandyan 128, Yerevan 0025, Armenia)

  • Svetlana Ratner

    (AMBERD Research Center, Armenian State University of Economics, Nalbandyan 128, Yerevan 0025, Armenia
    Department of Economic and Mathematical Modeling, Peoples’ Friendship University of Russia (RUDN University), Moscow 117198, Russia)

Abstract

Despite the fact that a decade has elapsed since the establishment of the Eurasian Economic Union (EAEU), the impact of the EAEU on the economic development of its member states remains a subject of ongoing debate. This article examines the mutual trade in services between the Eurasian Economic Union (EAEU) countries, with the aim of assessing the impact of membership on it. The difference-in-difference model has been applied for impact assessment. The model utilizes data from five EAEU member countries—Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia—capturing periods both before and after their EAEU membership, spanning 17 years in total. The results show that membership in the EAEU has significantly affected the exports of services from Russia and Belarus and has a less significant impact on the exports of services from Kazakhstan to the EAEU. At the same time, it has no significant effect on the exports of services from Kyrgyzstan and Armenia to other EAEU countries. In order to ascertain the challenges that exist, expert surveys among service exporters from Armenia have been conducted. Representatives of companies exporting various services to the EAEU have been selected as experts. The survey results indicate the presence of various barriers, including legal, logistical (for cargo transportation companies), and cultural challenges. These barriers encompass licensing difficulties, technical obstacles related to VAT refunds, a ban on cash payments, and difficulties with financial transfers due to sanctions against Russia. The findings of this research are of practical importance and can serve as a guideline for policymakers in the EAEU.

Suggested Citation

  • Davit Hakhverdyan & Ruzanna Tadevosyan & Anna Pakhlyan & Svetlana Ratner, 2025. "The Impact of Eurasian Economic Union Membership on Mutual Trade in Services: What Are the Challenges for Small Economies?," JRFM, MDPI, vol. 18(3), pages 1-15, March.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:3:p:143-:d:1608631
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    References listed on IDEAS

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    1. Adu, Derick T. & Li, Wenying & Sawadgo, Wendiam P.M., 2023. "Estimating the unintended impact of the North American free trade agreement on U.S. public health," Social Science & Medicine, Elsevier, vol. 333(C).
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    3. Mereke Tanaguzova & Simeon Nanovsky & Serik Orazgaliyev, 2023. "Assessing the Effect of Joining the World Trade Organization on Trade Performance: A Study of CIS Countries," Economies, MDPI, vol. 11(9), pages 1-17, September.
    4. Vinokurov, Evgeny & Demidenko, Mikhail & Korshunov, Dmitry & Kovacs, Mihaly, 2017. "Customs unions, currency crises, and monetary policy coordination: The case of the Eurasian Economic Union," Russian Journal of Economics, Elsevier, vol. 3(3), pages 280-295.
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