Armenia Ready to Act as Platform for Closer EEU-Iran Economic Relations

“This year, EEU member states and Iran signed an interim agreement as a first step for the formation of an Iran-EEU free trade zone. Armenia is the only EEU member state that has a land border with Iran," said Armenia's acting Prime Minister Nikol Pashinyan.

Pashinyan made the statement during the plenary session of the two-day Eurasian Week International Forum, which opened in Yerevan on Monday, Armenpress reported.

Iran and the Eurasian Economic Union are looking to substantially increase trade as the two sides signed a three-year provisional agreement on May 17 for the bloc to welcome Iran into EEU, according to Financial Tribune.

The arrangement is the first step in undertaking free trade between Iran and the five members of the union. It lowers or abolishes customs duties, setting off a three-year process for a permanent trade agreement.

"The presence of common border and the formation of free trade zone with Iran is an additional impetus for the development of commercial and economic ties," Pashinyan said.

The Russian Ministry of Industry and Trade has said that a full-fledged agreement on a free trade zone between Iran and the Eurasian Economic Union will be concluded by early 2022. 

According to the ministry, the interim agreement signed in May covers 50% of the trade between the parties and will come into force early 2019.

"We are ready to become a practical platform for establishment of reliable economic and commercial ties between EEU and Iran," the acting Armenian premier said, adding that he attaches importance to the fact that the union continues talks on free trade zone with countries interested in having cooperation with EEU.

The Eurasian Economic Commission Council approved last month the roadmap to implement the interim agreement on Iran’s entry into the Eurasian Economic Union Free Trade Zone.

By the end of this year, the Supreme Eurasian Economic Council plans to decide whether the roadmap will be mandatory for EEU member states.

“Plans are in place to agree on a comprehensive agreement with Iran within the next three years. In the future, it will cover almost all commodity groups,” the council said in a statement.

Referring to the transfer of EEU chairmanship to Armenia, Pashinyan said, “I am confident that the Eurasian Week will become the platform where contracts will be signed, all possible joint programs will be discussed and new business ties will be established. It’s welcoming that today’s forum is attended by more than 300 businessmen who are ready for long-term cooperation with the Eurasian partners, attracting investments and establishing partnership and mutual cooperation. The presence of so many businessmen proves the great interest towards the forum and the importance of taking concrete decisions.”

Iran’s free trade with EEU members is important, as the US has reinstated sanctions against the Islamic Republic. By putting into effect the agreement, the two sides are hoping to give a major boost to mutual trade and make up for the loss of global markers as a result of economic restrictions imposed on Iran as well as Russia, the leading member of EEU, by the United States.

Iran’s non-oil commercial exchanges with the five member states of the Eurasian Economic Union totaled $1.69 billion in the last Iranian year (March 2017-18) to register a decline of 35.38% compared with the year before, data released by the Islamic Republic of Iran Customs Administration showed.

Iran’s exports to EEU stood at $837.18 million during the period, indicating a 6.51% year-on-year increase.

Imports amounted to $858.02 million, down 53.3% YOY.

Iran’s total commercial exchanges with Russia were the highest in terms of value among the five member states of the bloc at $1.03 billion, down 42.14% YOY.

EEU was established in 2015 based on the Customs Union of Russia, Kazakhstan and Belarus, and was later joined by Armenia and Kyrgyzstan. 

In 2016, Vietnam officially became the first non-regional country to join the bloc’s free trade zone, which is designed to ensure the free movement of goods, services, capital and workers.