Iran, Eurasian Economic Union Transactions Top $1.7 Billion in 6 Months

EghtesadOnline: Iran and the Eurasian Economic Union have traded a total of 5.1 million tons of goods worth $1.78 billion from Oct. 27, 2019, when a preferential trade agreement between the two sides came into effect on April 24, 2020.

News ID: ۷۴۹۹۹۰

06 May 2020

According to Rouhollah Latifi, the spokesman of the Islamic Republic of Iran Customs Administration, the value of bilateral trade under the preferential trade agreement stood at $1 billion, accounting for around 56.46% of the total exchange, Mehr News Agency reported.

“Iran’s total exports to the bloc stood at 1.34 million tons worth $539.61 million, accounting for 30.27% of the total trade value. Imports from the five EEU member states hit 3.76 million tons worth $1.24 billion to account for 69.73% of overall trade,” he said.

Russia, Armenia and Kazakhstan were Iran's biggest export destinations from among the five EEU member states, accounting for 53%, 23% and 16% of Iran's overall exports to the bloc respectively.

Iran’s main exported goods included apples, fresh and dried pistachios, liquefied gas, kiwis, grapes, cucumbers, pickles and peppers, which made up 14%, 12%, 9%, 7.5%, 2.5% and 2.2% of the overall exports.

Imports from the bloc were mainly essential goods, such as barley, field corn, wheat, sunflower oil, lamb meat, lentils and thread, which accounted for 30%, 18.5%, 17.5%, 12%, 3%, 1.3% and 1.3% respectively of overall imports.

Other imported commodities include paper and industrial machinery.

Iran and the Eurasian Economic Union signed a three-year provisional agreement in Astana, Kazakhstan, on May 17, 2018, for the bloc to welcome Iran into the union. The arrangement, which lowers or abolishes customs duties, is the first step toward implementing free trade between Iran and the five EEU members.

The average tariff set by the union on Iranian goods as part of the preferential trade agreement stands at 3.1%, while the figure is 12.9% for EEU goods exported to Iran.

The two sides have listed 862 types of commodities in their three-year provisional trade agreement. As per the deal, Iran will enjoy easier export terms and lower customs duties on 502 items and the same goes for 360 items from the EEU member states.

Last month, EEU removed tariffs on the import of 11 Iranian agricultural and food products. It conveyed the decision to the Trade Promotion Organization of Iran in an official letter.

“These goods that can, from now on, be exported at a zero tariff include potato, onion, garlic, cabbage, carrot, chilies, wheat, grains, rice and ready-to-eat meals for kids. The measure taken by EEU in these difficult times when the country is battling the COVID-19 crisis, in addition to economic sanctions, can help boost our production and exports,” Reza Nourani, the head of Iran’s National Association for Agricultural Products, was quoted as saying by Fars News Agency.

To fully use this opportunity, the official said means, such as refrigerated containers, are required.

The Eurasian Economic Union member states include Russia, Kazakhstan, Armenia, Belarus and Kyrgyzstan.

The Iran-EEU agreement is deemed especially important, considering the economic pressure exerted by sanctions on Iran since the US last year unilaterally walked out of the nuclear deal it had signed with Tehran, alongside five world powers, in 2015. The sanctions have been aimed at restricting Iran's trade with other countries to cripple the Iranian economy, which Iranian officials have termed "economic war".

However, Hossein Selahvarzi, the deputy head of Iran Chamber of Commerce, Industries, Mines and Agriculture, says the trade deal with EEU is more of a practice in free trade for Iran rather than a short-lived escape from the US-imposed sanctions.

The official says free trade is the “rescue route” for Iran’s economy.

“If at the end of the road to joining the EEU, Iran can identify its points of weakness and strength in free trade, we can say it has made the most out of the agreement,” he was quoted as saying by the Persian economic daily Donya-e-Eqtesad.

“The level of trade exchanges between Iran and Eurasia could exceed $30 billion [per year],” said Deputy Industries Minister Hossein Modarres Khiyabani at Iran-Eurasia Trade Forum hosted in Tehran earlier this month.

Khiyabani noted that the current volume of Eurasia’s trade exchanges with other countries stands at $900 billion.