Iran exported $1.24 billion worth of commodities to the Eurasian Economic Union member states during the first 11 months of the current Iranian year (March 21, 2019-Feb. 19), registering a 105% upsurge compared with the similar period of last year.
According to Spokesman of the Islamic Republic of Iran Customs Administration Rouhollah Latifian, Russia was the main export destination for Iranian exports with $387.72 million worth of goods, Mehr News Agency reported.
Russia was followed by Armenia and Kazakhstan.
Iran’s main exported commodities to the Eurasian bloc included apples, liquefied natural gas, pistachio, kiwis, cucumbers, pickles, raisins and oranges.
6% Decline in Imports
According to Latifian, imports from EEU member states decreased by 6.13% year-on-year to reach $1.2 billion during the period under review.
Iran imports barley, field corn, sunflower oil, wheat and meat from EEU members.
Overall, Iran-EEU trade over the 11 months grew by 40% compared with the corresponding period of last year to stand at $2.44 billion.
In order to substantially increase trade, 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 EEU. 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 trade agreement.
Iran and EEU are looking to substantially increase trade, as they signed a three-year provisional agreement in Astana, Kazakhstan, on May 17, 2018, for the bloc to welcome Iran into EEU.
The preferential trade agreement came into effect on Oct. 27, based on which the two sides have three years to upgrade the treaty into a full-fledged free trade deal that lowers or abolishes customs duties.
The average tariff set by EEU for Iranian goods as part of their provisional preferential trade agreement stands at 3.1%, while Iran’s average tariff for commodities from EEU amounts to 12.9%, according to the deputy for international affairs with Iran Chamber of Commerce, Industries, Mines and Agricultures.
Iran’s main exported commodities to the Eurasian bloc included apples, liquefied natural gas, pistachio, kiwis, cucumbers, pickles, raisins and oranges
Iran and EEU have a total of 862 types of commodities listed in their PTA. As per the deal, Iran will enjoy much easier export terms and lower customs duties on 502 items and the same goes for 360 items from the EEU member states.
Director General of the International Affairs Bureau with the Islamic Republic of Iran Customs Administration Hossein Kakhaki said last month that the two sides had traded more than $1 billion worth of goods since Oct. 27, 2019, with Iran's exports under the preferential trade agreement standing at $87 million and EEU’s exports to Iran under PTA reaching $533 million.
“Iran’s total exports and imports to and from the five EEU member states have hit $347 million and $655 million respectively,” he was quoted as saying by IRNA.
The above figures show more than 25.1% of Iran's export to EEU and 81.37% of imports from the bloc into Iran have been carried out under the trade agreement.
The official noted that due to the significance of the country’s trade agreement with EEU, IRICA has taken an array of measures to ease trade procedures for exporters to the bloc by cutting red tape.
Sizable Market
Russia, Kazakhstan, Kyrgyzstan, Armenia and Belarus are EEU member states.
The union is an international organization that encourages regional economic integration through the free movement of goods, services and people within the union. It has an integrated single market of 183 million people and a gross domestic product of over $4 trillion.
The agreement is deemed especially important, considering unilateral economic sanctions against Iran imposed by US President Donald Trump last year after quitting the nuclear deal signed by Tehran in 2015 with six world powers. The sanctions have been aimed at restricting Iran's trade with other countries to cripple the Iranian economy, in what Iranian officials have termed as "economic war".
The nuclear deal, also known as the Joint Comprehensive Plan of Action, had removed international sanctions against Iran upon its implementation in 2016.
Hossein Selahvarzi, the deputy head of Iran Chamber of Commerce, Industries, Mines and Agriculture, says that the Iran-EEU agreement is more of a practice in free trade for Iran rather than a short-lived escape from the US-imposed economic sanctions.
The official says free trade is the “rescue route” for Iran’s economy.
“If at the end of the road of joining EEU, Iran can identify its points of weakness and strength in free trade, we can say it has made the most out of the agreement,” he was quoted as saying by Donya-e-Eqtesad daily.
“The level of trade exchanges between Iran and Eurasia could exceed $30 billion (per year),” said Deputy Minister of Industries, Mining and Trade for Commercial Affairs Hossein Modarres Khiyabani at the Iran-Eurasia Trade Forum hosted in Tehran earlier this month.
Khiyabani put the current volume of Eurasia’s trade exchanges worldwide at $900 billion.
