Iran’s preferential trade with Eurasian Economic Union hits $430m in first month

Iran has exported $180 million worth of commodities to Eurasian Economic Union member states under preferential tariffs since 28 October, when a trade agreement between the two sides came into effect. EAEU’s exports to Iran under the preferential trade agreement stood at $250 million during the same period.

30 December 2019
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Iran has exported $180 million worth of commodities to Eurasian Economic Union member states under preferential tariffs since 28 October, when a trade agreement between the two sides came into effect. EAEU’s exports to Iran under the preferential trade agreement stood at $250 million during the same period.

Iran’s northern port of Bandar Anzali is a hub of trade between Iran and the Eurasian countries. (Photo: ISNA)

Iran has exported $180 million worth of commodities to Eurasian Economic Union member states under preferential tariffs since 28 October, when a trade agreement between the two sides came into effect, according to Energy Minister Reza Ardakanian.

“EAEU’s exports to Iran under the preferential trade agreement stood at $250 million during the same period. Imports mainly comprised essential goods,” the minister, who doubles as chairman of Iran-Russia Economic Commission, was quoted as saying by Mehr News Agency.

The above figures, according to Ardakanian, show less than 23% of Iran's exports to EAEU and around 86% of imports from the bloc into Iran were carried out under the trade agreement.

“This is a very big gap. We need to reach a balance here with proper planning,” the minister said.

“Russia imports around $250 billion per year and given our favorable bilateral ties, we need to aim for this strong market."      

Iran and the Eurasian Economic Union signed a three-year provisional agreement in Astana on May 17, 2018, for the bloc to welcome Iran into EAEU. 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 average tariff set by EAEU for Iranian goods as part of their provisional preferential trade agreement stands at 3.1%, while Iran’s average tariff for commodities from EAEU amounts to 12.9%, according to the deputy for international affairs with Iran Chamber of Commerce, Industries, Mines and Agricultures.

Iran and EAEU have 862 types of commodities listed on their three-year provisional preferential trade agreement. As per the deal, Iran will enjoy much easier export terms and lower customs duties on 502 items and the same applies to 360 items from EAEU member states.

Masoud Kamali Ardakani, the deputy head of Trade Promotion Organization of Iran for export market expansion, said Iran’s annual exports to EAEU stand at $600 million whereas the country has the capacity to increase the figure to $20 billion per year.

“EAEU member states import around $320 billion worth of commodities per annum,” Mizan Online quoted the official as saying.

“EAEU’s total foreign trade amounts to close to $900 billion per annum. Iran’s share of this figure is nearly $2 billion.”

Ardakani noted that goods as varied as foodstuff, mineral products and construction material can be added to Iran’s export basket to EAEU.

“Iran has received an average of 56% discount on export tariffs for the 502 commodities it trades under the PTA with the bloc,” he said.

Governor General of Mazandaran Province Ahmad Hosseinzadegan said on Saturday the EAEU market’s main demand is for agricultural and food products.

“Mazandaran Province is a production hub for such products and therefore a headquarters for promoting economic relations with EAEU will be formed in this northern Iranian province. The headquarters will provide local businesspeople and traders with information on the capacities of the market of EAEU’s five member states,” he said.   

Based on figures released by the Islamic Republic of Iran Customs Administration, Iran mainly exports pistachios, kiwis, apples, tomatoes, cucumbers, cabbages, grapes, dates, hydraulic cement, refined copper, methanol and pharmaceuticals to EAEU countries.

In exchange, major commodities imported into Iran from EAEU states include barley, sunflower oil, raw vegetable oils, field corn, radio navigation devices, cathodes, steel products, pine timber and sheep carcasses.

The agreement is important in view of the unilateral US economic sanctions imposed on Iran in 2018 after Washington walked out of the nuclear deal the world powers signed with Tehran in 2015.

 

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