Transactions With ECO Exceed $9.2 Billion in Seven Months

EghtesadOnline: Iran’s transactions with the Economic Cooperation Organization member states stood at 20.33 million tons worth $9.23 billion in the current fiscal year’s first seven months (March 21-Oct. 22), according to the latest statistics released by Islamic Republic of Iran Customs Administration.

News ID: ۷۸۷۳۰۱

17 November 2021

Iran’s exports stood at 17.44 million tons worth $6.03 billion while the country imported 2.89 million tons worth $3.2 billion.

Turkey with 11 million tons worth 3.4 billion was the main export destination among ECO members.

It was followed by Afghanistan with 2.79 million tons worth $1.13 billion, Pakistan with 1.59 million tons worth $655.15 million, Azerbaijan with 465,603 tons worth $272.96 million, Uzbekistan with 463,175 tons worth $243.72 million, Turkmenistan with 796,502 tons worth $145 million, Kazakhstan with 281,783 tons worth $95.21 million, Kyrgyzstan with 23,910 tons worth $41.75 million and Tajikistan with 33,774 tons worth $24.81 million.

Imports to ECO members hit 2.89 million tons worth $3.2 billion in the seven months under review. These mainly came from Turkey with 2.5 million tons worth $2.86 billion, Pakistan with 180,700 tons worth $169.6 million, Uzbekistan with 37,933 tons worth $71.82 million, Kazakhstan with 109,520 tons worth $34 million, Azerbaijan with 15,392 tons worth $27.04 million, Turkmenistan with 29,815 tons worth $22.08 million, Afghanistan with 8,759 tons worth $9.35 million, Tajikistan with 2,326 tons worth $5.6 million and Kyrgyzstan with 3,052 tons worth $1.61 million.

Economic Cooperation Organization members are Iran, Turkey, Pakistan, Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.

Iran and ECO member states traded 23.73 million tons of goods worth $11.71 billion in the last Iranian year (March 2020-21), with Iran’s exports standing at 18.42 million tons worth $6.89 billion while imports hovered around 5.31 million tons worth $4.82 billion.

The Economic Cooperation Organization is a Eurasian political and economic intergovernmental organization founded in 1984 in Tehran by the leaders of Iran, Pakistan and Turkey. It provides a platform to discuss ways of improving development and promoting trade and investment opportunities.

An ad hoc organization under the United Nations Charter, ECO aims to establish a single market for goods and services.

ECO's secretariat and cultural department are located in Iran, its economic bureau is in Turkey and its scientific bureau is in Pakistan. Consisting of predominantly Muslim-majority states, it is a trade bloc for Central Asian states connected to the Mediterranean region through Turkey, to the Persian Gulf via Iran and to the Arabian Sea via Pakistan.

Iran traded a total of 98.7 million tons of non-oil goods worth $54.8 billion with other countries during the seven months to Oct. 22 to register an increase of 16.5% in weight and 43% in value compared with the corresponding period of last year.

According to Mehdi Mirashrafi, the head of the Islamic Republic of Iran Customs Administration, exports stood at 75.2 million tons worth $27.1 billion, which shows year-on-year growth rates of 15% and 47% in weight and value respectively.

“Iran’s imports hit 23.5 million tons worth $27.7 billion, registering an increase of 21% in weight and 38% in value compared with last year’s same period,” he was quoted as saying by the news portal of IRICA.

“Essential goods, machinery, industrial parts, raw materials and intermediate goods accounted for the lion’s share of imports.”

ECO’s ITI Road Corridor Activated

A ceremony was held on Oct. 8 at Murat Bey Customs Post in Istanbul to mark the arrival of the first two of Pakistan’s National Logistics Company (NLC) trucks carrying goods from Pakistan to Turkey, via Iran, under the Transports Internationaux Routiers convention.

The NLC trucks departed from Karachi on Sept. 28 and reached Istanbul on Oct. 7, covering a distance of 5,300 kilometers, Pakistan Observer reported.

Senior officials of the Turkish Ministry of Transport and Infrastructure, Ministry of Trade, Chamber of Commerce and Commodity Exchanges of Turkey, International Road Transport Union, ECO Secretariat, Iran’s Ministry of Roads and Urban Development, NLC, members and representatives of the Turkish private sector related to transport, and Pakistan’s Ambassador to Turkey Muhammad Syrus Qazi, accompanied by representatives of Pakistan Embassy and Consulate, participated in the ceremony.

Umberto de Pretto, secretary-general of IRU, based in Geneva, Switzerland, also attended this ceremony.

Participants hailed the development as a vital step in promoting connectivity and enhancing trade between Pakistan and Turkey.

In his remarks, Qazi highlighted Pakistan’s focus on geoeconomics and how regional connectivity was crucial in this regard. He hailed the trial run of NLC trucks as a historic step that will strengthen road connectivity between Pakistan and Turkey, and also help promote bilateral trade.

The ambassador noted that operationalization of this road link will help reduce the cost and time for transportation.

The revival of Islamabad-Tehran-Istanbul Road Transport Corridor will generate revenue, boost trade and increase economic cooperation among ECO member states. After the initial successful run, NLC intends to increase and regularize freight transport between Pakistan and Turkey, helping to bring the two countries closer.

Javad Hedayati, director general of Transit Affairs Bureau of Road Maintenance and Transportation Organization of Iran, said the ITI Corridor can easily replace the Suez Canal route.

“ECO’s ITI transportation corridor holds huge potential; for one thing, transportation time between Istanbul and Pakistan is reduced to 10-12 days from 25-30 days [through the Suez Canal]. The corridor reduces transportation costs by 30%,” he was quoted as saying by the news portal of the Ministry of Roads and Urban Development.

According to the official, transportation costs rose dramatically in the wake of the Covid-19 pandemic.

“This has made road freight transport even more cost-effective. Today, there is a great opportunity for us to use our transit corridors, ITI in particular, to their full potential.”

TIR enables goods to be shipped from a country of origin, through transit countries, to a country of destination in sealed load compartments that are controlled by customs via a multilateral, mutually recognized system. It is said to be the easiest, safest and most reliable way to move goods across multiple international borders, saving time and money for transport operators and customs authorities.

The TIR Convention is a multilateral treaty concluded in Geneva on Nov. 14, 1975, to simplify and harmonize the administrative formalities of international road transport.

“Iran is located on corridors linking north to south and west to east,” says Mohammad Lahouti, the head of Iran Export Confederation, adding that the country remains the most important corridor to cross West Asian region, though many countries tried to somehow replace it over these years.

ITI Rail Corridor Expected to Be Relaunched in 2021

Besides road, the ITI corridor also links the three countries along the way via railroad.

The freight train is expected to be relaunched in 2021 and has created a positive atmosphere for those in the business world, wrote Turkey’s Anadolu Agency.

The connecting train services were initially launched in 2009, but was suspended in 2011 due to several delays in Pakistan.

While 1,850 kilometers (1,150 miles) of the railroad are in Turkey, 2,603 kilometers (1,620 miles) are in Iran and 1,990 kilometers (1,230 miles) are in Pakistan.

In 2020, at the 10th ECO Transport and Communications Ministers Meeting, participants decided to relaunch the railroad in 2021.

Ahmet Cengiz Ozdemir, chairman of the Foreign Economic Relations Board of Turkey-Pakistan Business Council, said the train has critical importance in the development of countries in Turkey's regional integration.

"The railroad, aiming to strengthen communication and interaction between three countries, is not active due to uncertainties and conflicts in the region," he said.

Ozdemir underlined that the three countries can benefit from the railroad that can be integrated with air and seaways.

The duration of 14 days (via railroad) provides advantages in terms of time and cost compared to seaways, he added.

Commenting on China's Road and Belt Project to connect China and Europe uninterruptedly, he said the ITI railroad is also important for China, considering Chinese investments in Pakistan and Iran.

“Thanks to the free trade agreement between China and Pakistan, third countries can export to China without paying customs duties,” he said.

“The launch of the railroad in the coming days, which has big implications for the region, has created a positive environment for the business world. We are aware that the route will provide access to important markets. We hope that the problems will be resolved soon, even before the end of 2021.”

The Turkish official underlined that the train is also important for passengers because it provides lower prices versus airways.

Ozdemir stressed that the line will also provide opportunities for neighboring countries such as Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan and China.