Call for Overhauling Iran-Turkey PTA

EghtesadOnline: An analysis carried out by the Research Center of Iran Chamber of Commerce, Industries, Mines and Agriculture on Iran’s trade with Turkey before and after the implementation of the bilateral preferential trade agreement in 2015 shows that the deal has not benefited the Iranian side.

News ID: ۷۷۵۷۶۸

27 April 2017

The PTA was signed in January 2014 and took effect a year later.

Based on the initial agreement, Turkey lowered tariffs for 125 Iranian goods while Iran reduced rates for 140 Turkish items.

ICCIMA, as reported by the Persian daily Sharq, believes Iran has lost the ground mainly because of choosing the wrong type of goods to be exported to Turkey, arguing that some 80% of the goods chosen by Iran as part of PTA had not been among the country’s exports to the neighboring country prior to the agreement’s implementation, Financial Tribune reported.

A study of trade balance in PTA-included commodities shows transactions favor the Turkish side.

ICCIMA believes Turkey has carefully selected commodities with high potential in the Iranian market, whereas Iran has chosen goods with low export value.

The items Turkey has opted to export to Iran at preferential tariffs include textile and clothes, electric equipment, healthcare products, steel products, auto parts, furniture, home appliances, plastic, aluminum, wood, rubber and glass products as well as auto spare parts.

Iran’s exported commodities, as part of the PTA, include fruit, vegetable, spice, convenience food, juice, biscuit, chocolate, chewing gum, pickle, tomato paste, licorice roots, fish, flower, dairy products and egg.

The PTA stipulates no weight limit for Turkey’s exports to Iran, though there is a 51% weight limit on Iran’s exported commodities.

ICCIMA believes the list of Iran’s export items should be revised, taking into account Iran’s export capacities and Turkey’s performance.

The chamber also calls on Iranian traders to enhance their packaging standards to give a boost to their exports.

In addition, establishing brands and trademarks in Turkey can help Iranian businesses expand their businesses, ICCIMA concludes.

As Iran is not a member of World Trade Organization, pursuing preferential agreements with other countries seems to be the only way to enhance its commercial ties.

More than 20 years have passed since WTO received Iran’s application for accession on July 19, 1996. It took the organization nine years to accept Iran as an observer member.

In 2005, WTO eventually established a working party composed of a group of representatives tasked with assessing Iran’s accession bid. However, the chairman of the party has not yet been elected.

Today Iran remains the world’s largest economy outside the world body.