Azerbaijan’s Disruption of Iran-Armenia Trade Under Fire

EghtesadOnline: The government of Azerbaijan has imposed a $130 toll fee since about a week ago on Iranian trucks exporting goods to Armenia via the border region occupied by Azerbaijani forces, says Hervic Yarijanian, the head of Iran-Armenia Chamber of Commerce.

News ID: ۷۸۷۰۵۰

20 September 2021

“Azerbaijan is trying to damage Tehran-Yerevan bilateral trade, which would also hit Iran’s trade with the Eurasian Economic Union,” he was quoted as saying by ILNA.

“Based on what is stipulated in Iran-EEU preferential trade agreement, Iran’s observer member period has come to an end and we now have to be on the way to becoming a permanent member. Here, the volume of economic interactions between Iran and EEU’s five member countries are of great significance. Yet, the Azerbaijani government’s new measure is blocking the easy flow of commodities between Iran and Armenia.”

The official complained that the new policy of charging Iranian trucks headed to Armenia has been implemented to hamper the entry of Iranian goods into the neighboring country and increase their end prices, robbing Iran’s products of their competitive edge.

“By creating delays for Iranian commodities to enter the Armenian market, a void will be created, which will, no doubt, soon be filled with products from other rival countries,” he added.

Noting that Armenia invited Iran to join the Eurasian bloc in the first place, Yarijanian said the country plays a considerable role in changing Iran’s status from an observer member to a permanent one.

“Once this comes about, our trade with EEU members, Armenia in particular, is estimated to experience a hike. Seeing this coming, some regional states are not exactly happy.”

“Prior to the impediment caused by Azerbaijan, Iran-Armenia trade was gradually gaining momentum and Iranian goods were finding footholds in this neighboring market,” he noted, saying that Iranian businesses have tried hard and spent a lot to find their way into the Armenian market over the years which, given the new state of events, created by Azerbaijan, could all go to waste.

“We ask the Iranian government to intervene through diplomatic methods to alleviate this hindrance to keep Tehran-Yerevan bilateral trade on its growing path,” he added.

Based on figures released by the Islamic Republic of Iran Customs Administration, Iran and Armenia traded a total of $321.87 million worth of non-oil products in the last Iranian year (March 2020-21).

According to the head of IRICA, Mehdi Mirashrafi, Iran’s exports to this northwestern neighbor over the period under review stood at $304.55 million while imports from that country reached $17.32 million.

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 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 PTA came into effect on October 27, 2019. The two sides are currently holding talks to upgrade PTA into a free trade agreement.

Goris-Kapan Highway Blockage

Last month, Azerbaijani forces even blocked part of the land route between Iran and Armenia for a few days.

“Azerbaijani troops blocked two segments of the Goris-Kapan Highway that connects Armenia with Iran,” the head of Kapan community, Gevorg Parsyan, told reporters

“The Azerbaijanis continue to block the Karmrakar-Shurnukh and Goris-Vorotan sections, essentially cutting three Armenian settlements from Armenia. Besides, as a result, we are losing contact with Iran because an alternative route through Tatev cannot facilitate the movement of large trucks," Parsyan added.

Armenian Prime Minister Nikol Pashinyan said later that the move violated agreements among Yerevan, Baku and Moscow. In accordance with the statement adopted by the leaders of Russia, Armenia and Azerbaijan on November 9, 2020, seven districts adjacent to the disputed Nagorno-Karabakh region were handed over to Baku with the exception of the Lachin Corridor connecting Armenia and Nagorno-Karabakh.

The Karmrakar-Shurnukh and Goris-Vorotan segments of the highway connecting Armenia with Iran were also handed over to Azerbaijan but a Russian border post was set up there to ensure the free movement of people and vehicles, TASS reported.

Iranian Ambassador to Azerbaijan Abbas Mousavi held a discussion with the Azerbaijani Deputy Prime Minister Shahin Mustafayev on the state of traffic on the Gorus-Gafan road during a meeting, Trend News Agency reported on Saturday, citing the Iranian Embassy in Azerbaijan.

According to the report, during the meeting, the new situation on the border between Azerbaijan and Armenia, the new conditions of traffic on the Gorus-Gafan road and other issues were discussed.

Gorus-Gafan highway connects Armenia with Iran. A small section of this route passes through the territory of Azerbaijan via Eyvazli Village of the Gubadli region. Recently, a number of Armenian media outlets reported that Azerbaijani police and customs officers were inspecting Iranian trucks crossing the territory of the republic.

Raeisi-Pashinyan Discussions

Earlier on Friday, Iran’s President Ebrahim Raeisi and Armenia’s Prime Minister Nikol Pashinyan discussed ways of deepening bilateral commercial ties complicated by an Azerbaijani checkpoint set up on the main highway connecting the two neighboring states.

Raeisi and Pashinyan met on the sidelines of a Collective Security Treaty Organization summit in Tajikistan as Azerbaijani officers stopped and demanded hefty payments from Iranian trucks transporting goods to and from Armenia for the sixth consecutive day, MassisPost reported on Sept. 17.

More than a hundred such trucks were reportedly stranded on Thursday at a 21-kilometer section of the highway joining Goris to Kapan. Azerbaijani authorities set up the checkpoint there on Sunday after again accusing Iranian trucks of illegally shipping cargos to Nagorno-Karabakh.

The Armenian government’s press office said Pashinyan and Raeisi discussed, among other things, ways of “organizing unfettered cargo shipments between the two countries” as well as “processes taking place in the region.”

According to the statement posted on the Iranian Foreign Ministry’s website, Pashinyan pledged to “instruct relevant ministers” to remove the obstacles.

It was Pashinyan’s second meeting with Raeisi in less than two months. The two men held their first face-to-face talks in early August when the Armenian premier visited Tehran to attend Raeisi’s swearing-in ceremony held in the Iranian Parliament.

During those talks, Pashinyan reaffirmed his government’s readiness to have Iranian companies participate in its plans to refurbish Armenian highways leading to the Islamic Republic. The two governments set up in May a working group tasked with looking into practical aspects of implementing such a project.