The Supreme Council of Iran’s Free Trade and Industrial and Economic Zones endorsed establishment of two new free trade zones, one in Ardebil and another in Ilam province, in its latest session held on Tuesday.
“The bill for the establishment of Mehran free trade zone in the western Ilam province will be soon submitted to the parliament for final ratification,” said the governor-general of Ilam province, Mohammad Reza Morvarid, adding that after parliament approval, operations will be undertaken as soon as possible to establish the zone, IRNA reported on Tuesday.
In July last year, President Hassan Rouhani assigned his advisor, Akbar Torkan, to carry out executive works to establish a Free Trade Zone in the city of Mehran. The border city of Mehran located southwest of Ilam province has 220 kilometers of joint border with Iraq.
The high level of security as well as lingual, tribal, religious and cultural diversity are among the unique advantages of the city for the establishment of the free trade and economic zone.
Mehran border is often frequented by Iranian pilgrims, Iraqi pilgrims and tourists, as 6,000 people commute through the border terminal each day.
> Ardebil Free Trade Zone
According to Majid Khodabakhsh, the governor-general of Ardebil province, the Supreme Council of Iran’s Free Trade, Industrial & Special Economic Zones has also endorsed the setting up of another independent free trade zone in Ardebil.
“The bill, which was discussed in the presence of the first Vice-president, Es’haq Jahangiri, will be soon submitted to the parliament for final endorsement,” he was quoted by IRNA as saying, hoping that lawmakers will approve the bill.
He said the establishment of Ardebil independent free trade zone will revolutionize the regional economy.
In August last year, the government approved of connecting northern parts of Ardebil province to Aras free trade zone, which is located in northwestern Iran at the border point neighboring Armenia, Azerbaijan and Autonomous Republic of Nakhchivan. However, according to the new bill, the government has instead decided to establish an independent free trade zone in Ardebil province itself.
Meanwhile, first vice-president Es’haq Jahangiri says the establishment of free trade zones is among the many development plans that the government has high on its agenda.
“We have to be cautious that the zones will not be turned into a market for consumer goods,” Jahangiri warned, explaining that the free trade zones will have special privileges for investment.
The term free trade zone (FTZ) is commonly used as a generic name to refer to any modern economic zone, where business and trade laws differ from the rest of the country.
Broadly, FTZs are aimed at increasing trade, attracting investment, and creating jobs as governments ease regulations in such areas. To encourage businesses to set up in economic zones, officials ease regulation on labor, investment, taxation system, trade, and customs
> Ports’ High Tariffs Criticized
Elsewhere, Managing Director of Islamic Republic of Iran Shipping Lines, Mohammad Hossein Dajmar, criticized the high rate of tariffs levied on shipping activities carried out within the country’s ports.
“The tariff rates in Iranian ports are much higher than those in many other countries in the region, and that has made Iranian ports less attractive than what they should be,” he said, noting that tariff rates in Iranian ports are increased by 10% every year.
He also lamented that shipping activities in Iranian ports are largely run by the government, which has made these ports very unproductive.