The study shows the highest volume of trade between the two sides during the period was in the fiscal 2019-20 and the lowest was in fiscal 2016-17.
The highest trade balance was registered in the fiscal 2020-21 with $93 million in deficit.
Iran and EEU signed a three-year provisional agreement in Astana, Kazakhstan, on May 17, 2018, for the bloc to welcome Iran.
The arrangement is the first step in implementing free trade between Iran and the five members of the union. It lowers or abolishes customs duties, setting off a three-year process for a permanent free trade agreement.
Armenia, Kazakhstan, Kyrgyzstan, Belarus and Russia are EEU members.
The average tariff set by Eurasian Economic Union 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.
Trade Decline in Fiscal 2020-21
Bilateral trade stood at $2.1 billion in the fiscal 2020-21, registering an 11% year-on-year decline in value, according to the data released by Islamic Republic of Iran Customs Administration.
Of this amount, imports accounted for $1 billion as exports stood at $1.1 billion.
Iran’s payment issues, as a result of US sanctions and Coivd-19 restrictions, were the main reasons behind the decline in trade.
The study shows that 2% of the 11% decline are due to a 9% decrease in total exports and 9-16.5% decline in total imports.
Iran and EEU 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 EEU member states.
EEU removed tariffs on imports of 11 Iranian agricultural and food products in April. It conveyed the decision to 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, chili, wheat, grains, rice and ready-to-eat meals for kids. The measure taken by EEU in these difficult times as 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.
In the fiscal 2020-21, from the goods included in Iran-EEU trade agreement, only 58 were exported from Iran to Eurasia, accounting for 25% of Iran’s total exports to this union.
Armenia with 49 types of goods traded at preferential tariff, Kazakhstan with 40, Russia with 36, Kyrgyzstan with 25 and Belarus with 15 were the main destinations of EEU region for exports of Iranian goods under the trade agreement.
Preferential tariffs were set for about 60% of Iran’s exports to Kyrgyzstan, 44% to Kazakhstan, 27% to Russia and Belarus, and 4% to Armenia.
The highest volume of exports in terms of value was registered with Russia. In the fiscal 2020-21, exports to Russia stood at $501 million (48% of Iran’s total exports value to the EEU), registering an 8% growth compared with the year before.
Armenia with $304 million (29% of the total exports) was Iran's second export destinations in terms of value and Kazakhstan with $167 million (16.1%) was the third export destination. Kyrgyzstan with $46 million (4.5%) and Belarus with $20.6 million followed.
The highest volume of imports was also from Russia, which stood at $1 billion (94% of total import value), registering a 10% YOY decline.
Of the total imports from EEU region, imports accounted for 3.4% from Kazakhstan, 1.6% from Armenia, 0.8% from Belarus and 0.5% from Kyrgyzstan.
Free Trade Talks
Iran and the Eurasian Economic Union are holding talks on abolishing customs duties to achieve free trade with zero tariffs.
“Negotiations on free trade with zero tariffs have been going on between Iran and the EEU since last week … If this goal is achieved, we will get access to an unrivaled market because the EEU only has preferential agreements with Vietnam, Singapore and Serbia,” the advisor for international affairs and trade agreements of Trade Promotion Organization, Mirhadi Seyyedi, said recently.
“Such an achievement will bring positive results to our economic interaction in the region,” he added.
The official stressed that enhancing trade with EEU will facilitate our trade and financial interactions.
Iran’s foreign non-oil trade stood at 145.7 million tons worth $73 billion in the last fiscal year (March 2020-21).
According to Mehdi Mirashrafi, the head of Islamic Republic of Iran Customs Administration, exports accounted for 112 million tons worth $34.52 billion and imports constituted 34.4 million tons worth $38.5 billion of the sum.
Iran’s main exports included gasoline, natural gas, polyethylene, propane and pistachio, with the latter alone earning $1.2 billion.
“The main export destinations were China with 26.6 million tons worth $8.9 billion, Iraq with 25.6 million tons worth $7.3 billion, the UAE with 15.2 million tons worth $4.6 billion, Turkey with 6.3 million tons worth $2.5 billion and Afghanistan with 7 million tons worth $2.2 billion. These five countries imported more than 80 million tons of non-oil goods worth $25.7 billion,” he was quoted as saying by Mehr News Agency.
China, Iran’s biggest trading partner, accounted for 26% of Iran's total non-oil exports, as 26.58 million tons of non-oil goods worth $8.95 billion were shipped from Iran to China during the period. Pistachio, nuts, minerals, construction materials, methanol, carpet, iron ore, glassware and fruits were the main goods exported by Iran in the last fiscal year.
Imports from China totaled 3.54 million tons worth $9.76 billion during the year to March 20, 2021, to account for 10.6% of the total volume and 25.3% of the total value of Iran’s imports during the period.
Industrial machinery and raw materials, medical equipment, paper, wood, textile, auto parts and sports equipment were Iran's main imports from the South Asian state in the fiscal 2020-21.
“Iran’s foreign trade reduced by 25 million tons due to sanctions and the Covid-19 pandemic,” he said, adding that the country’s trade deficit stood at $4 billion.
The Eurasian Economic Union has an integrated single market of 180 million people and a gross domestic product of over $5 trillion. It encourages the free movement of goods and services, and provides for common policies in the macroeconomic sphere, transport, industry and agriculture, energy, foreign trade and investment, customs, technical regulation, competition and antitrust regulation.
A single currency and greater integration are envisioned for the future.