Transactions With Eurasian Economic Union at $2.1b Since PTA Came Into Effect

EghtesadOnline: Iran and the Eurasian Economic Union have traded $2.11 billion worth of goods since Oct. 27, 2019, when the preferential trade agreement between the two sides came into effect, according to the spokesman of the Islamic Republic of Iran Customs Administration.

News ID: ۷۵۰۱۶۱

06 June 2020

“Trade under the preferential trade agreement accounted for around 53% of the total sum," Rouhollah Latifi was quoted as saying by IRNA on Monday.

“Iran’s total exports to the bloc reached over $584 million, accounting for 27.67% of the total trade value. Imports from the five EEU member states hit $1.52 billion, which account for 72.32% of Iran-EEU’s trade value over the period.”

Latifi noted that 53%, 23% and 16% of Iran’s exports went to Russia, Armenia and Kazakhstan respectively, which made them the country’s biggest export destinations from among the five EEU member states.

The spokesman added that Iran’s main exported goods included apples, pistachios, liquefied natural gas, kiwis and grapes, which made up 14.5%, 11.9%, 8.1%, 7.2% and 3% of the exports respectively.

“About 78.5%, 18% and 2% of our imports came from Russia, Kazakhstan and Belarus respectively. Armenia and Kyrgyzstan each had less than a 1% share in exports to Iran. Our imports from the bloc were mainly essential goods, such as barley, wheat, field corn, sunflower oil and lamb meat that accounted for 27%, 24%, 17.5%, 11% and 3.5% respectively of our total purchases over the period,” he said.

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

The average tariff set by EEU on Iranian goods as part of a 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.

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

“Goods that can, from now on, be exported at zero tariff include potato, onion, garlic, cabbage, carrot, chili, 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 be able to use this opportunity fully, the official added, the infrastructure, including refrigerated containers, is necessary.

EEU member states include Russia, Kazakhstan, Armenia, Belarus and Kyrgyzstan.

The Iran-EEU agreement is deemed especially important, considering unilateral American sanctions against Iran since US President Donald Trump last year walked out of the nuclear deal the world powers signed with Tehran in 2015. The sanctions have been aimed at restricting Iran's trade with other countries to cripple the Iranian economy, in what Iranian officials have termed as "economic war".

Hossein Selahvarzi, the deputy head of Iran Chamber of Commerce, Industries, Mines and Agriculture, says the trade deal is more of a practice in free trade for Iran rather than a short-lived escape from the US-imposed economic 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 Donya-e-Eqtesad daily as saying.

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

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