President of the joint Iran-Russia Chamber of Commerce says a new free-trade zone deal with Eurasian Economic Union will give Tehran the upper hand in keeping its economy afloat following the revival of unilateral US sanctions.
“If this deal passes the parliament by the end of March 2019, it’ll benefit Iran especially after the renewal of US sanctions”, says Hadi Tizhush Taban in an interview with Iran Chamber Newsroom.
Last May the Eurasian Economic Unión (EAEU), comprised of Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia agreed to create a free trade zone with Iran. Later in November, Russian President Vladimir Putin ratified the decision. According to Tizhush Taban, who chairs Iran-Russia Joint Chamber of Commerce, the agreement has been ratified by the parliament's of all five countries and is waiting its approval by the Iranian Parliament, also known as Majlis.
The decision allows Iran entrance into the free trade zone during a 3-year trial period and gives it unlimited access to the five countries’ markets.
One of the main features of this deal is that Iranian businesses can export their goods under “very low tariffs” to the Eurasian Unión. Citrus such as apple, cultivated abundantly across Iran, will be one of those agricultural products that will make their way to the Union countries benefiting from the low tariffs. Dairy, food, fruit and industrial products will be other items on the list.
But there is a problem. “Iran has prohibited the import of more than a hundred items such as wheat and if we enter this agreement, we need to resolve this issue as well. This is while Russia has lots of wheat”, criticises the president of the Iran-Russia Joint Chamber of Commerce.
Tizhush Taban believes Iran can make most of importing Russian wheat by making it into flour and then exporting it to other neighbouring countries such as Iraq.
The US has recently reimposed economic sanctions on Iran which has highly affected the financial transactions dominated by the US dollar and euro. However, Iran and Russia have already replaced dollar with ruble to circumvent the sanctions. “It’s not impossible. Right now, to make financial transactions with Russia, you can either do it through euro or ruble. The trade transactions will be held in rial and ruble”, emphasises the Iran businessman.
Tizhush Taban criticises the low trade volume with Russia, although the two countries share a natural border as well as historic and cultural ties. But, he hopes the recent agreement increase economic cooperation between the two countries to 10 billion dollars. “Iran and Russia trade volume is below 2 billion dollars, however with this agreement, we hope to reach at least 10 billions” he says.
He believes a rise in the mutual trade volume between Tehran and Moscow will also help his country to overcome the challenges it faces in its cargo transport infrastructure.