Domestic Economy

Iran Commerce Chamber Marks 24th National Export Day

Iran’s 15 neighbors accounted for 70% of the country’s total exports during the first half of the current Iranian year (March 20-Sept. 21)
Iran Commerce Chamber Marks 24th National Export Day
Iran Commerce Chamber Marks 24th National Export Day

Iran Chamber of Commerce, Industry, Mines and Agriculture hosted a gathering of experts and officials to mark the 24th National Export Day on Monday.
Top officials attending the annual event included First Vice President Es’haq Jahangiri, Minister of Industries, Mining and Trade Alireza Razm-Hosseini, Chairman of Majlis Economic Commission Ezatollahl Akbari and ICCIMA President Gholamhossein Shafei.
Every year, top exporters are awarded in the event on the occasion of the National Export Day, IRNA reported.
In an address to the event, Hamid Zadboum, the head of Trade Promotion Organization of Iran, said, “Our first priority [in exports] is our 15 neighboring countries along with India and China and the second priority goes to Asian countries, some in Africa and even Latin America.”
He added that Iran’s 15 neighbors accounted for 70% of the country’s total exports during the first half of the current Iranian year (March 20-Sept. 21), which share stood at 60% over the first six months of the previous fiscal year (March 21, 2018-Sept. 21, 2019) and 55% during the first half of the fiscal 2017-18.
Zadboum noted that over the last Iranian year (March 2019-20), Iran’s exports to its neighboring countries stood at at $24 billion.
The official believes Iran’s exports to its 15 neighbors, namely the UAE, Iraq, Turkey, Afghanistan, Pakistan, Russia, Oman, Azerbaijan, Turkmenistan, Kuwait, Qatar, Kazakhstan, Armenia, Bahrain and Saudi Arabia, have the potential to reach $125 billion per year.
“The Ministry of Industries, Mining and Trade has set the target to raise Iran's annual exports to neighboring countries to $48 billion by the fiscal 2021-22,” former caretaker of the Ministry of Industries, Mining and Trade, Hossein Modarres-Khiyabani, said.
According to Modarres-Khiyabani, Iran currently has a 2% share in the neighboring countries' total imports and if the target is realized, the share will rise to 4%.
“Neighboring states have $1.2 trillion worth of imports [per year] while Iran’s share is only $24 billion,” he said.



Free Trade Talks

Speaking at the Monday event, Zadboum noted that Iran is in free trade talks with Pakistan and Serbia.
He also referred to Iran’s three-year provisional agreement with Eurasian Economic Union, which was signed in Astana on May 17, 2018, for the bloc to welcome Iran into EEU. 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 the Eurasian Economic Union on Iranian goods as part of the PTA stands at 3.1%, while the figure is 12.9% for EEU goods exported to Iran.
Iran and EEU have listed 862 types of commodities in their trade agreement, based on which 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 the import of 11 Iranian agricultural and food products in April and conveyed the decision to the Trade Promotion Organization of Iran in an official letter.
“These goods that can, from now on, be exported at zero tariff include potato, onion, garlic, cabbage, carrot, chilies, wheat, grains, rice and ready-to-eat meals for kids. The measure taken by EEU in these difficult times when 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.
Zadboom said negotiations on reaching a full-fledged free trade agreement with EEU is likely to begin in February.
Latest data on Iran’s overall exports released by the customs administration show Iran exported 85.2 million tons of non-oil goods worth $25.1 billion during the nine months leading to Dec. 20. 
Compared with the corresponding period of last year (March 21-Dec. 21, 2019), exports registered a 17% and 20% decline in weight and value respectively. 
The main export destinations over the period included China with 20.6 million tons of non-oil goods imports from Iran worth $6.4 billion, Iraq with 20.8 million tons worth $5.9 billion, the UAE with 11.4 million tons worth $3.3 billion, Turkey with 5.4 million tons worth $1.8 billion and Afghanistan with 5.2 million tons worth $1.7 billion.



Foreign Non-Oil Trade

Global trade has dropped by 30% following the outbreak of coronavirus and Iran was no exception. 
“Seven countries, including China, Iraq, Afghanistan, the UAE and India, account for 75% of our foreign trade; over 50% of Iran’s non-oil exports are headed to Iraq and China, all indicative of our export vulnerability," Majid Reza Hariri, the chairman of Iran-China Chamber of Commerce, was quoted as saying recently.
“Natural gas, gas condensates, petrochemicals and unprocessed minerals make up 70% of Iran's exports. Covid-19 has pushed down demand for and the prices of these exporting items. For our production lines to be operational, about $45 billion worth of essential goods, pharmaceuticals and medical equipment need to be imported. Given the restrictions placed on oil sales, this figure appears to be unreachable.” 
Pedram Soltani, a member of Iran Chamber of Commerce, Industries, Mines and Agriculture’s board of directors, said Iran has to prepare for a 30% decline in export value in the current Iranian year (March 2010-21) compared with last year due to the impacts of the coronavirus outbreak on national and international trade.
“Under the current circumstances, it is estimated that the country’s exports will fall by $10-12 billion compared with last year. The main products that will experience a plunge due to the pandemic are petrochemicals, steel, mineral products, tiles, ceramics and nuts,” he was quoted as saying by ISNA.
Soltani added that China is most likely the least affected economy by the pandemic and since it is Iran’s top trading partner, hopefully exports to this country will remain unaffected.
“Yet, the outbreak of Covid-19 as well as the plunge in oil prices will make Iraq, our second biggest export destination, very cautious and we will be facing limitations on the commodities we can export to the neighboring country.” 
Soltani noted that based on World Trade Organization’s prediction, world trade will see a 13-32% decline in 2020 (best- and worst-case scenarios), noting that it is likely that the economic crisis awaiting the world now will be more intense than the one experienced in 2008.

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