Increasing import tariffs on commodities listed in the preferential trade agreement with Turkey could give rise to smuggling, secretary of Iran-Turkey Commercial Cooperation Council, Seyyed Jalal Ebrahimi, has warned.
“Imposing high import tariffs, while beneficial to domestic manufacturers, could encourage illegal trade,” ISNA quoted the official as saying.
Iran and Turkey signed a PTA in 2014, which went into effect in January 2015. According to the deal, both countries agreed to reduce tariffs on a list of products imported from the other side. The PTA list currently includes 142 Iranian products and 120 Turkish products.
But as the agreement allows both countries to revise import tariffs or change some items in the list every three months in line with their national interests, deputy minister of industries, mines and trade, Valiollah Afkhamirad, had announced earlier that Iran is planning to increase import tariffs on some Turkish commodities in line with the national interests.
Ebrahimi argued that while PTAs are generally intended to reduce customs tariffs and duties, trade liberalization could hurt domestic industries in the absence of well-developed manufacturing infrastructure.
“Increasing the tariffs will give rise to smuggling as consumers are naturally attracted to cheap, high-quality products,” said Ebrahimi, emphasizing the need to support domestic industries while fighting against smuggling.
He referred to mountainous borders between Iran and Turkey as one of the main obstacles to fighting smuggling, noting that confronting smugglers requires a national movement.
Promoting the use of domestic products by Iranian households was mentioned by the expert as another measure to combat smuggling.
According to data released by the Ministry of Industries, Mines and Trade, $2 billion worth of clothing are smuggled into the country annually, while legal imports stand far behind at $6 million.
