Iran’s Minister of Communications and Information Technology Mahmoud Vaezi met Turkish Minister of Economy Nihat Zeybekci in Istanbul on Thursday to negotiate revision of a preferential trade agreement between the neighboring countries.
Each side is planning to add 60 items to the list of commodities included in PTA, which has been in effect since January 2015, IRNA reported.
The preferential tariff system, which compels both countries to levy lower rates of duty on imports from each other than they do on imports from other countries, is expected to ease two-way transactions of goods and services.
Based on the preliminary agreement, tariffs on 125 Iranian goods were lowered in Turkey’s favor and those of 140 Turkish goods reduced in favor of Iran. The pact was signed on January 29, 2014, when the then Turkish Premier (now President of Turkey) Recep Tayyip Erdogan paid an official visit to Tehran, but it took a year for it to take effect.
Zeybekci described PTA as an important tool to help expand bilateral ties and remove trade obstacles. He said he expects the two sides to finalize a revision of the items included in the agreement during the upcoming visit of Iran’s First Vice President Es’haq Jahangiri to Turkey.
Iran and Turkey are looking at the prospects of upgrading the agreement to a full-blown free trade deal in the future, in line with their goal of increasing mutual trade to $30 billion per annum.
According to Islamic Republic of Iran Customs Administration, Iran-Turkey trade shrank 26% in the last Iranian year (March 2015-16) compared with the year before, despite the implementation of PTA. IRICA’s latest data, however, indicates a rebound in commercial exchanges.
Iran exported 9.2 million tons of non-oil goods worth $3.2 billion to Turkey during the seven months to October 21, registering a 316% upsurge in value compared to last year’s corresponding period.
Gas, copper, aluminum, steel, zinc, petrochemicals, watermelon, pistachio and raisins were among the main exported commodities.
More than 987,000 tons of commodities worth $1.5 billion were imported from Turkey to Iran during the same seven-month period, indicating a 16% decline year-on-year. Imports mainly included banana, grain, cigarette, tobacco, machinery, wood, cotton, beans, steel, pharmaceuticals, paper, shampoo and apparel.
Bilateral trade was on an upward trend until 2010 when the EU and the US tightened sanctions on Iran’s economy in 2010.
Non-oil trade witnessed a 6% decline in the Iranian year to March 2012. However, it rebounded to a record high of more than $6 billion during the Iranian year to March 2013.
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