EghtesadOnline: Iran’s non-oil commercial exchanges with the five member states of the Eurasian Economic Union totaled $1.69 billion during the last Iranian year (March 2017-18) to register a decline of 35.38% compared to the year before, Financial Tribune’s data analysis based on the Islamic Republic of Iran Customs Administration’s statistics shows.
Iran’s exports to EEU stood at $837.18 million during the period, indicating a 6.51% year-on-year increase.
Imports amounted to $858.02 million, down 53.3% YOY.
Iran’s total commercial exchanges with Russia were the highest in terms of dollar value among the five member states of the bloc at $1.03 billion, down by 42.14% YOY.
Iran exported $293.52 million worth of non-oil commodities to Russia, up 34.06% YOY and imported $743.15 million worth of Russian goods in return, down 52.74% YOY.
Following Russia, Kazakhstan was Iran’s second biggest trading partner in EEU, with bilateral trade amounting to $234.69 million, down 41.86% compared with the previous year.
Iran’s exports to Kazakhstan stood at $167.98 million, down 12.82% YOY, while imports reached 66.70 million, down 68.38% YOY.
Iran-Armenia trade reached $231.78 million, indicating a 15.82% growth YOY. Iran exported $205.91 million worth of goods to Armenia, up 14.88% YOY, as imports stood at $25.86 million, up 23.8% YOY.
Iran’s trade with Kyrgyzstan saw a decline of 11.27% YOY as the two sides’ commercial exchanges stood at $174.04 million. Iran’s exports to Kyrgyzstan went down by 12.82% to reach $167.98 million. Imports saw a huge rise of 75.23% YOY to stand at $6.05 million.
Iran-Belarus trade experienced a decline of 43.48% YOY to stand at $18.01 million. Both exports to and imports from Belarus had huge decreases, reaching 28.93% (standing at $1.76 million) and 44.71% (standing at $16.24 million) respectively.
Iran and the Eurasian Economic Union are looking to substantially increase their bilateral trade, as the two sides signed a three-year provisional agreement for the bloc to welcome Iran into EEU’s free trade zone last month.
The arrangement is the first step in promoting free trade between Iran and the five members of the union.
It lowers or abolishes customs duties, setting off a three-year process for a permanent trade agreement.
“The current agreement includes an initial list of goods with lowered or cancelled customs fees upon its enforcement. The agreement covers half of mutual trade,” Tigran Sargsyan, chairman of EEU’s economic commission board, said.
“Our negotiators have already set a long-haul objective for the next three years to agree a full-fledged accord on a free trade zone.”
According to the official, the temporary agreement stipulates an effective dispute settlement mechanism, including arbitration. It also creates a joint committee of high-ranking officials and establishes a framework for conducting business dialogue.
Sargsyan referred to several major advantages in EEU countries and Iran when the agreement comes into force.
First of all, entrepreneurs will be able to save on customs duties. The list for EEU includes meat products, confectioneries and chocolate, cosmetics, electronic and mechanical equipment.
Iran will enjoy tariff discounts on a wide range of food products, primarily vegetables, fruit, dried fruit, building materials, crockery, carpets and nonferrous metal products.
With regard to industrial products, Iran will reduce the average rates of import duties for EEU member states by 7% (from 22.4% to 15.4%) while EEU member states will decrease duties on these goods for Iran by 3.3% (from 8% to 4.7%).
Iran will cut import duties on farm products by 19% (from 32.2% to 13.2%) while EEU do the same by 5% (from 9.6% to 4.6%).
Another advantage is a transparent and predictable trade environment.
“The provisional agreement provides for compliance by the parties with the fundamental principles of international trade. The document formalizes the scheme similar to WTO [World Trade Organization] rules, which imposes obligations and requirements on Iran though the country is not a WTO member,” Sargsyan said.
The parties also agreed not to apply unreasonable non-tariff measures restricting trade in respect of goods listed in the agreement.
EEU was established in 2015 based on the Customs Union of Russia, Kazakhstan and Belarus, and was later joined by Armenia and Kyrgyzstan. In 2016, Vietnam officially became the first non-regional country to join the bloc’s free trade zone, which is designed to ensure the free movement of goods, services, capital and workers.
Since then, more than 40 countries and international organizations, including China, Indonesia, South Korea, Egypt and India, as well as some South American countries, have expressed interest in a free trade deal with EEU.