Iran and the Eurasian Economic Union member states traded a total of $2.1 billion worth of non-oil commodities in the last Iranian year (March 2020-21), which shows an 11% decline compared with the year before, figures released by Tehran Chamber of Commerce, Industries, Mines and Agriculture reveal.
Iran’s exports to EEU hit $1.1 billion, registering a 4% fall compared with the previous year while imports from the Eurasian bloc stood at around $1 billion, showing a 16.5% decrease.
Exports from Iran under the preferential trade agreement signed with EEU members stood at $256 million, accounting for close to 25% of the country’s exports to the bloc over the period under review.
The TCCIM report attributes the decline in trade to the Covid-19 pandemic.
The Eurasian Economic Union member states include Russia, Kazakhstan, Armenia, Belarus and Kyrgyzstan.
Iran and the Eurasian Economic Union signed a three-year provisional agreement in Astana, Kazakhstan, 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 PTA came into effect on October 27, 2019.
Iran’s exports under the preferential trade agreement signed with EEU members stood at $256 million, accounting for close to 25% of the country’s exports to the bloc over the period under review
Iran and EEU are holding talks on abolishing customs duties to reach free trade with zero tariffs.
“Negotiations on free trade with zero tariffs have been going on between Iran and EEU since last week … If this goal is achieved, we will have a reach to an unrivaled market because EEU only has preferential agreements with Vietnam, Singapore and Serbia,” the advisor for international affairs and trade agreements of Trade Promotion Organization, Mirhadi Seyyedi, said recently.
“Such an achievement will bring positive results to our economic interaction in the region,” he added.
The official stressed that enhancement of trade with EEU will facilitate Iran’s trade and financial interactions.
The average tariff set by EEU on Iranian goods as part of a preferential trade agreement 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. As per the deal, 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 imports of 11 Iranian agricultural and food products in April.
EEU conveyed the decision to the Trade Promotion Organization of Iran in an official letter.
“These goods that can, from now on, be exported at a zero tariff include potato, onion, garlic, cabbage, carrot, chili, 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.
EEU was created in part in response to the economic and political influence of the European Union and other western countries. Key objectives of EEU include increasing cooperation and economic competitiveness for member states and promoting stable development to raise their standards of living.
EEU has an integrated single market of 180 million people and a gross domestic product of over $5 trillion. EEU encourages the free movement of goods and services, and provides for common policies in the macroeconomic sphere, transport, industry, agriculture, energy, foreign trade and investment, customs, technical regulation, competition and antitrust regulation. Provisions for a single currency and greater integration are envisioned for the future.
Total Foreign Trade at $73b
Iran’s foreign non-oil trade stood at 145.7 million tons worth $73 billion in the last fiscal year (March 2020-21).
According to Mehdi Mirashrafi, the head of the Islamic Republic of Iran Customs Administration, exports accounted for 112 million tons worth $34.52 billion and imports constituted 34.4 million tons worth $38.5 billion of the sum.
Iran’s main exports included gasoline, natural gas, polyethylene, propane, and pistachio, with the latter alone earning $1.2 billion.
“The main export destinations were China with 26.6 million tons worth $8.9 billion, Iraq with 25.6 million tons worth $7.3 billion, the UAE with 15.2 million tons worth $4.6 billion, Turkey with 6.3 million tons worth $2.5 billion and Afghanistan with 7 million tons worth $2.2 billion. These five countries imported more than 80 million tons of non-oil goods worth $25.7 billion,” he was quoted as saying by Mehr News Agency.
China, Iran’s biggest trading partner, accounted for 26% of Iran's total non-oil exports, as 26.58 million tons of non-oil goods worth $8.95 billion were shipped from Iran to China during the period. Pistachio, nuts, minerals, construction materials, methanol, carpet, iron ore, glassware and fruits were the main types of goods exported from Iran to China in the last fiscal year.
Imports from China totaled 3.54 million tons worth $9.76 billion during the year to March 21, 2021, to account for 10.6% of the total volume of Iran's imports and 25.3% of the total value of imports during the period. Industrial machinery and raw materials, medical equipment, paper, wood, textile, auto parts and sports equipment were Iran's main imports from the South Asian state in the fiscal 2020-21.
“Iran’s foreign trade declined by 25 million tons due to sanctions and the Covid-19 pandemic,” he said, adding that the country’s trade deficit stood at $4 billion.
