Iran to Make Most of Eurasia Preferential Trade Agreement

Iran’s ambassador to Kazakhstan highlighted Tehran’s efforts to maximize its benefits from a preferential trade agreement it recently signed with members of the Eurasian Economic Union, stressing the need for providing robust legal and banking infrastructures to that end.

In an interview with Tasnim News Agency, Mojtaba Damirchiloo also emphasized the need for providing “legal, banking, financial and technical infrastructures” to boost relations between Iran and EEU, and get the most out of the temporary preferential trade agreement that was signed in May.

The envoy added that a series of measures have been put on the agenda, including a mechanism to facilitate monetary transactions with the national currencies of trade partners, creating other banking mechanisms and training Iranian exporters.

Damirchiloo noted that if Iranian exporters develop the abilities to tap into the preferential trade deal, they could have access to the markets of EEU members with greater ease.

Commenting on the political and economic relations between Iran and Kazakhstan, the ambassador pointed to growing bilateral trade ties in recent years, saying the two sides have defined the legal principles by signing a series of agreements.

Hailing close coordination between Iran and Kazakhstan in regional and international organizations over the past 25 years, the ambassador said Tehran and Astana have supported the stances of each other over many regional and international issues.

Iran and the Eurasian Economic Union are looking to substantially increase bilateral trade as the two sides signed a three-year provisional agreement on May 17 for the bloc to welcome Iran into EEU free trade zone.

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.

“The current agreement includes an initial list of goods with lowered or cancelled customs fees upon its enforcement. The agreement covers half of mutual trade,” chairman of EEU economic commission board, Tigran Sargsyan, was quoted as saying.

“Our negotiators have already set a long-haul objective for the next three years to agree a full-fledged accord on a free trade zone,” he added.

According to the official, the temporary agreement stipulates an effective dispute settlement mechanism, including arbitration. It also creates a joint committee of high-ranking officials and establishes a business dialogue.

EEU was established in 2015 based on the Customs Union of Russia, Kazakhstan and Belarus, and was later joined by Armenia and Kyrgyzstan.

In 2016, Vietnam officially became the first non-regional country to join the bloc’s free trade zone, which is designed to ensure the free movement of goods, services, capital and workers.

Since then, more than 40 countries and international organizations, including China, Indonesia, South Korea, Egypt and India, as well as some South American countries, have expressed interest in a free trade deal with EEU.