Economy, Domestic Economy

PTA With Turkey May Be Expanded

PTA With Turkey May Be Expanded
PTA With Turkey May Be Expanded

Iran and Turkey are working to expand their recently signed Preferential Tariff Agreement (PTA) to include more items in the list of commodities traded at preferential tariff rates, head of Iran’s Trade Promotion organization (TPO), Valliollah Afkhamirad said on Monday.

Noting that Turkey is planning to add certain commodities to the PTA list, the official said Iran will accordingly propose the addition of 40 new items to the list in a meeting with Turkish officials in May, ISNA reported.

“The items to be added by the Iranian side include energy-intensive commodities, therefore care has to be taken for export of such goods as Iran is located in an arid region and face water shortage,” said Afkhamirad, stressing that national interest must be taken into consideration while deciding on export to Turkey.

Iran penned its first preferential PTA with Turkey when President Recep Tayyip Erdogan (who at that time was prime minister) visited Iran in January 2014. According to the agreement, 125 Iranian and 140 Turkish goods are traded at preferential tariff rates.

The PTA contract drew severe criticism by Iranian experts, arguing that the government’s policy to reduce import tariffs on Turkish goods will be in Turkey’s favor and harm domestic manufacturers as they are unable to compete with Turkish manufacturers.

PTA supporters argue that the policy will benefit domestic manufacturers in the long run, as it will provide a competitive atmosphere for Iranian manufacturers, encouraging them to produce quality products in accordance with international standards and latest technological developments.

Iran also proposed a PTA with India when Afkhamirad met with the Additional Secretary to India’s Ministry of Commerce and Industry, Rajani Ranjan Rashmi in March. The matter resurfaced during the recent visit by India’s Commerce Secretary, Rajeev Kher to Tehran to attend the first meeting of the joint working group (JWG) of the two countries, ISNA reported, citing Delhi-based Press Trust of India (PTI).

Although Iran currently has PTAs with nine countries, including Pakistan, Tunisia, Bosnia, Uzbekistan, Kyrgyzstan, Syria, Venezuela, Cuba, and most recently Turkey the country accounts for only about 2% of the world’s preferential trade agreements.