Economy, Business And Markets

Russia Calls for Removing Trade Obstacles

Russia Calls for Removing Trade Obstacles
Russia Calls for Removing Trade Obstacles

Russia’s Minister of Agriculture Alexander Tkachyov called on Iran and Russia to address limitations hindering business ties to double the value of trade.

Tkachyov was speaking in a meeting with Iran’s Minister of Information and Communications Technology Mahmoud Vaezi in Tehran on Monday, IRNA reported.

The official, who was heading a business delegation of government officials and private sector players to Tehran, said Russia is intent on developing and facilitating its agricultural trade ties with Iran by establishing a “green corridor”.

“We need to establish modern logistics to help deliver Iranian goods to Russia, create ‘a green corridor’ on the Russian border for Iranian goods and ease customs formalities to speed up clearance of Iranian cargoes,” Russian news agency Tass quoted Tkachyov as saying in January.

Tkachyov also proposed the two countries’ customs administrations share their data to “cut down on operational costs and minimize delays in goods clearance”.

Vaezi, who is also the co-chair of Iran-Russia Economic Commission, said the corridor will be a catalyst for increasing bilateral trade and emphasized the necessity of diversifying transportation links between the two countries.

The Iranian minister added that the completion of the railroad connecting Iran and Azerbaijan’s Astara cities, as part of the International North-South Transport Corridor, is a decisive factor in bolstering Tehran-Moscow trade ties.

The transport corridor is shipping, rail and road routes for moving freight from India to Europe through Central Asia, the Caucasus and Russia. The route primarily involves moving freight from India to Iran by ship; from Iran to Armenia and Georgia by rail and road; and from Georgia to Russia and Europe.

Iran has taken center-stage in providing agricultural products to Russia since the downing of a Russian warplane in Syria by the Turkish air force soured Turkey-Russia relations.

Among other restrictions, Russia banned food imports from Turkey, one of its main trade partners annually providing it with 1.5 million tons of agricultural goods, back in 2015. Turkey’s exit from Russia’s market has opened up a vacuum that Iran wants to fill.

Also in 2014, the European Union and a number of other governments around the world imposed diplomatic and economic sanctions against individuals, businesses and officials from Russia over the Russian military intervention in Ukraine. In retaliation, Russia responded with sanctions against a number of countries, including a total ban on food imports from the EU, the United States, Norway, Canada and Australia.

With Russia’s trade partners growing thinner, Iranian companies have stepped in to meet Moscow’s demand for food and agricultural goods.

Late 2015, the two countries’ representatives in the joint economic commission agreed to boost annual bilateral trade from its current $2 billion to $10 billion in the near future.