Iran’s trade with Eurasian Economic Union member states stood at 13.13 million tons worth $5.64 billion in the fiscal 2021-22 (ended March 20), registering a 51% and 66% year-on-year growth in weight and value respectively, according to Rouhollah Latifi, spokesman of the Islamic Republic of Iran Customs Administration.
Exports to the five member states hit 2.77 million tons worth $1.17 billion, up 3.5% and 12% YOY in terms of weight and value respectively.
Russia with 1.14 million tons (up 8% YOY) worth $583.66 million (up 10% YOY) was the top export destination during the period. It was followed by Armenia with 1.05 million tons (down 15% YOY) worth $302.34 million (down 0.5% YOY), Kazakhstan with 517,628 tons (up 54% YOY) worth $188.87 million (up 13% YOY), Kyrgyzstan with 45,873 tons (up 56% YOY) worth $78.9 million (up 72% YOY) and Belarus with 11,934 tons (up 77% YOY) worth $16.81 million (down 20% YOY), IRNA reported.
Imports stood at 10.37 million tons worth $4.47 billion, registering a 73% and 90% YOY growth in weight and value respectively.
Russia was also the top exporter to Iran with 9.1 million tons (up 74% YOY) worth $4.05 billion (up 92% YOY). It accounted for 88% of the total weight and 91% of the value of Iran’s total imports from EEU during the period.
Livestock feed, essential goods and edible oils were the main imported commodity from Russia.
Kazakhstan came next with 1.24 million tons (up 67% YOY) worth $379.27 million (up 88% YOY), Belarus with 9,280 tons (down 28% YOY) worth $28.61 million (down 8% YOY), Armenia with 4,475 tons (down 29% YOY) worth $9.07 million (up 24% YOY) and Kyrgyzstan with 935 tons (down 57% YOY) worth $1.66 million (down 35% YOY).
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 union’s five members.
The average tariff set by the Eurasian Economic Union 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.
The two sides listed 862 types of commodities in their three-year provisional trade agreement. As per the deal, Iran was to enjoy easier export terms and lower customs duties on 502 items and the same went for 360 items from EEU member states.
Exports to Be Exempt From Customs Duties as of Sept. 2022
Iranian exports to the Eurasian Economic Union member states will be exempt from customs tariffs as of September 2022, the managing director of Iran-EEU Export Consortium Center has said.
“Our exports need to measure up to the standards of the EEU market. To arrive at this goal, we have established offices in Moscow and Yerevan to help with the export of Iranian goods and guide traders on the demands of destination markets,” Amir Abbas Afsharamin was also quoted as saying by the Persian daily Ta’adol.
As per an agreement with EEU, he added, the raw materials of end products destined for exports to the bloc will be procured meticulously so that Iranian products could compete with rivals in the Eurasian market.
The official noted that many of Iran’s processed foodstuff, including dried nuts, dates, pasta, different types of pastry, chocolates and canned food, already have the required standards to be exported to EEU’s five member countries.
Unfortunately, he said, most of Iran’s raw agricultural products do not meet EEU’s required standards.
“Some of our dates, for example, are not disinfected on par with EEU standards. This is why the consortium has decided to step in and process such goods as demanded by these export destinations,” he added.
Afsharamin noted that the consortium has rented shelves in chain stores across the bloc as part of measures to facilitate exports of Iranian products.
“Another field where Iranian businesses are capable of producing high quality end products is the furniture and wooden artifacts industry. Yet, there are shortcomings in the production chain of furniture regarding raw materials. To overcome this problem, an export consortium has been founded, which is mainly responsible for providing businesses active in the field with high quality raw materials, including fabric, sponge, particle boards and wood, at prices lower than those in our domestic market. This is the biggest agreement ever made with our furniture industry to procure a specific raw material and complete the production chain,” he said.
Interim Trade Extended Until 2025
The interim free trade agreement between EEU and Iran has been extended until 2025, the official representative of the Eurasian Economic Commission, Iya Malkina, told a briefing for the press after the Supreme Eurasian Economic Council meeting on Dec. 10, BelTA reported.
"During the summit, the parties signed a protocol to the interim agreement leading to the formation of a free trade zone between the Eurasian Economic Union and Iran," Iya Malkina said. "The interim agreement has been extended until Oct. 27, 2025 or until the free trade agreement enters into force, whichever comes first."
She recalled that negotiations on the full-fledged free trade agreement are based on the regime in force between EEU and Iran in accordance with the interim agreement since October 2019. In H1 2021, trade with Iran posted high growth: The exports of EEU member states surged by almost 47% to total $1.35 billion, imports by 34% to $825 million. Trade between EEU countries and Iran increased by 27% over the same period in 2019, exports rose by 27% and imports by almost 70%.
The Supreme Eurasian Economic Council’s Summit was held via videoconference. It was attended by Belarusian President Aleksandr Lukashenko.
Armenian Prime Minister Nikol Pashinyan endorsed the early conclusion of a full-fledged free trade agreement between Iran and the Eurasian Economic Union, ARKA news agency reported.
"A key component of the effective development of EEU, highlighted in its development strategy, is expansion of international cooperation and creation of a wide network of trade and economic relations. In this context, I think it is important once again to draw attention to the conclusion of a full-fledged free trade agreement between Iran and EEU as soon as possible," he said.
Pashinyan stressed that the provisional (free trade) agreement with Tehran has clearly shown the potential and prospects for further deepening of cooperation.
"And despite reaching mutually beneficial agreements on a number of issues during the first round of talks held in Yerevan in early November, the extension of the provisional agreement for this period is justified," he said.
Pashinyan stressed that during these years, different formats of cooperation with third countries have been worked out.
The solution to these problems, he added, is summed up in the main directions of EEU international activity for 2022, which fixes the key vectors and practical priorities of the union's international activity for the next year, emphasizing potentially promising areas.
"Within the framework of the Eurasian integration, a sufficiently stable institutional framework has been formulated, a common market is being established and there is certain success in the sphere of international cooperation," he said.
