The Forum for Partners in Iran's Marketplace
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     

March 2021, No. 96


Partnership

Putins Account of Trade Talks with Iran


Russia, Belarus, Armenia, Kyrgyzstan and Kazakhstan are the five EAEU countries, with trade value of about $750 billion a year.


The Russian President Vladimir Putin announced a new decision to start negotiations for a Eurasian free trade agreement with Iran. According to a report published on Putins official website, he said while addressing a meeting of the Supreme Eurasian Economic Union (EAEU), that the decision to start the first phase of negotiations on a free trade agreement with Iran will kick off.

Putin said that it had already been decided to establish a free trade zone between the members of this organization on the one hand and the Islamic Republic of Iran on the other. The EAEU is implementing a cooperation agreement with major economic powers such as China and India. The first round of talks on a free trade agreement with India will take place in the near future. We (at this meeting) will decide whether to start similar talks with Iran, he added.

Statements by the Russian Foreign Minister 

Russian Foreign Minister Sergei Lavrov said in a statement: The volume of trade between Iran and Russia increased by 20% last year, and during the outbreak of the coronavirus, the volume of trade between the two countries increased by 8%, which has not been the case with any country. Lavrov also noted an increase in Iranian exports to Russia last year, which he said has grown significantly.

Referring to the signing of a preferential trade agreement between Iran and the EAEU, he said: With the signing of this agreement, the market of the EAEU countries will open to Iran and therefore I believe that Iranian citizens should be well informed about this.

Lavrov added: There is no problem with Iranian employers and businessmen in Russia and that there are rules that apply to all foreigners. It all depends on the interest of the partners. We are trying to increase joint projects between Iran and Russia, not only in our country but also in other EAEU states. The preferential trade agreement has been in force for a year between Iran and the EAEU. During this period, the volume of trade between Iran and the EAEU has increased by 15%. Irans exports to Eurasian markets increased by 30%.

Lavrov said that Russia cooperates with Iran in all fields, from agriculture to information technology, and if you look at the official statistics of trade, this year the trade exchange is more than 20% and in the first six months of this year, when the coronavirus pandemic began to spread, bilateral trade increased by 8 percent. We have practically no such indicators of cooperation with any country. In the context of the coronavirus pandemic, trade in goods has increased and our imports from Iran have grown much faster than our exports to the Islamic Republic of Iran, he added.

 In 2019, an interim agreement between Iran and the EAEU entered into force, which in principle provides the conditions for the union to open a large market for Iran. Therefore, it is necessary to inform the citizens of the Islamic Republic of Iran about our economic and trade relations, he noted. Emphasizing the need to expand economic cooperation between Iran and Russia, Lavrov added: We have economic potentials that can be expanded. Lets not forget the cooperation between the two countries in the technical-military field, which can be developed.

History of Irans Cooperation with Eurasia

The cooperation was launched in 2018 at a time when Iran had already taken several operational steps to promote trade with the five EAEU countries. In the first step, Irans trade authorities and EAEU officials agreed in early 2018 to reduce tariffs on 862 items. The agreement was notified to the relevant bodies in July this year after the approval of the Parliament; In fact, through the agreement, which came into force in November 2019, a step was taken towards the establishment of a free trade zone between Iran and the five EAEU countries. According to the announced plans, after the implementation of the reduction of trade tariffs and a year later, negotiations for the signing and reaching a free trade agreement between Iran and this union will begin. According to trade officials, the talks could last for three years, until a free trade agreement between Eurasia and Iran is finally reached within a period of 8 to 10 years.

Eurasian Atlas 

Russia, Belarus, Armenia, Kyrgyzstan and Kazakhstan are the five EAEU countries, with trade value of about $750 billion a year. This economic union has signed various agreements with some countries, including free trade, preferential trade, and so on. Irans first priority since 2019 has been to focus on free trade with the five countries, but in the first phase it focused on preferential trade. In general, Iran has five stages for the development and promotion of trade cooperation. These are the preferential tariffs, free trade, customs union, common market and creation of an economic union.

The list of concessions granted by Iran to the EAEU is classified into 11 commodity groups. These groups can be distinguished in the fields of food and agriculture, industry, mining and machinery. In total, as previously announced, Irans preferences for Eurasia include 360 ​​items. Of this amount, 34 tariff codes are related to meat and edible viscera, fish and other aquatic products, 63 tariff codes are related to agricultural and dairy products and 46 tariff codes are related to chemical products and related industries. Also, three tariff codes are assigned to plastic materials and known objects from these materials, 43 tariff codes are related to wood and wooden objects, wood paste, paper and cardboard and 18 tariff codes are related to textile materials and products from these materials.

In this list, jewelry made of precious metals includes 17 tariff codes, ordinary metals and their products 43 tariff codes, and machinery, mechanical appliances and electrical appliances 58 tariff codes. Also 29 tariff codes are related to air and ground vehicles and 6 tariff codes are related to optics and photography devices.

The EAEU has also offered discounts for 502 items of trade with Iran under a preferential trade agreement with Tehran. In this regard, in the list of Eurasia concessions granted to Iran, there are 126 tariff codes related to agricultural products, food industry, and meat and fish products. Mineral products and mineral fuels and oils have 49 tariff codes. Some 90 tariff codes for chemical and pharmaceutical products are also included in the discount. Two tariff codes for rubber materials, four tariff codes for textiles and clothing, 32 tariff codes for products made of stone, plaster and ceramics, 22 tariff codes for glass and glass products and eight tariff codes for precious stones and metals.

But the most interesting product in this list is carpets and other flooring made of textile materials that include all carpet items. This is while the advantages of this sector for Iran cannot be ignored; because 45 tariff codes are subject to 100% tariff cuts. Some 48 tariff codes for cast iron, iron and steel products are also on the Eurasia list of concessions. Copper and copper products with 3 tariff codes, machinery and mechanical devices with 43 tariff codes, machinery and electrical appliances with 13 tariff codes and vehicle parts and components with 17 tariff codes are in this list. According to experts, the agreement was reached with Russia, Kazakhstan, Belarus, Kyrgyzstan and Armenia, which could be a competition for domestic producers and improve the quality of Iranian products. Economists see the preferential tariff as a step towards practicing competitiveness and combating trafficking. Preferential trade allows Iranian producers to improve their product quality and gain an important position in the 180-million Eurasian market.

 

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