Economy, Domestic Economy

Removal of Apparel From PTA With Turkey Defended

Removal of Apparel From PTA With Turkey DefendedRemoval of Apparel From PTA With Turkey Defended

The removal of textile products from the list of items covered by Iran-Turkey Preferential Trade Agreement was an essential step, an official with Iran Chamber of Commerce, Industries, Mines and Agriculture said.

“With competition from cheap Turkish imports, the apparel industry was bound to face a serious crisis,” Ahmad Kimiaie-Asadi added.

Last month, ISNA reported that there is no mention of textile products on the list of Iran-Turkey PTA in the book of Imports/Exports Rules for the current Iranian year (March 2016-17). This means clothing imports from the neighboring country no longer enjoy lower import tariffs.

Mehdi Raeeszadeh, with Iran Textile Association, confirmed the news then and said the move is expected to bring about a positive change in the domestic textile industry.

“Recession coupled with excessive imports is a double whammy hitting domestic textile industry really hard. The Turkish PTA dealt a further blow to the industry,” he added.

Soon after the controversial agreement went into effect last year, textile industrialists voiced concerns about a surge in apparel imports and losing the market to Turkish exports.

According to Kimiaie-Asadi, Iran has the largest share of illegal garment imports from Turkey.

“Statistics show that the clothes smuggled into Iran are way more than what the figures released by Turkey suggest,” he said.

According to the Anti-Smuggling Central Taskforce, some $2.7 billion worth of clothing are smuggled into Iran every year. The extensive land border with Turkey has enabled smugglers to easily cross to and fro carrying large amounts of goods. The retailers of smuggled clothes, including many shop owners in Tehran and border provinces such as Kurdistan and West Azarbaijan, frequently travel to Turkey and get their orders transported to depots on the Turkish side of the border, after which local smugglers and villagers carry the goods into mainland Iran.

“Our textile industry is gradually gaining momentum, but it’s not strong enough to compete with Turkey. Therefore, we need to keep it running by enforcing supervisory measures and appropriate import tariffs,” the ICCIMA official said.

The PTA to reduce tariff barriers was signed during the visit of Turkish President Recep Tayyip Erdogan (who was then Turkish prime minister) to Tehran in January 2014 after negotiations that lasted 10 years. The agreement went into effect in January 2015.

Based on the PTA, tariffs on 125 Iranian goods were lowered in Turkey’s favor and those of 140 Turkish goods were reduced in favor of Iran. The Iran-Turkey PTA allows both sides to revise import tariffs or change some items in the list every three months to protect their domestic industries.