Iran, Eurasian Economic Union Trade Under PTA Surpasses $1.5 Billion
EghtesadOnline: Iran and the Eurasian Economic Union traded more than $1.5 billion worth of goods under their preferential trade agreement between October 27, 2019, when the PTA came into effect, and June 19, 2020.
According to Hamid Zadboum, the head of Trade Promotion Organization of Iran, more than $383.51 million worth of goods were exported to EEU member states under PTA.
The main exported commodities under PTA during the period were apple worth $83.85 million, followed by in-shell pistachio ($79.77 million), kiwi ($42.36 million), raisins ($19.01 million), vegetables ($18.1 million), allspice ($15.44 million), cucumber and gherkin ($14.33 million), dates ($12.49 million), orange ($11.82 million) and tomato paste ($6.06 million), ILNA reported.
Zadboum added that imports from EEU member states under PTA stood at $1.12 billion during the same period.
Barley was the main imported product with $412.3 million, followed by field corn ($294.91 million), unrefined sunflower oil ($210.31 million), lumber ($61.71 million), fresh or frozen lamb ($40.55 million), lentil ($18.39 million), polyamide thread ($17.33 million), chickpeas ($10.23 million), paper (49.09 million), red meat ($7.96 million), steel products ($4.09 million), conifer wood ((3.3 million), genetically-modified colza ($2.36 million) and catalysts ($2.3 million).
Overall Trade at $2.4b
Overall, Iran and the Eurasian Economic Union have traded 6.86 million tons of commodities worth $2.41 billion worth of goods over the period under review (including commodities exchanged outside PTA), showing a 14% increase year-on-year.
Iran and EEU accounted for 28% and 72% of the total trade respectively.
The country’s total exports to the bloc, said the official, reached 1.65 million tons worth $681 million, indicating a 17% YOY growth in value. Imports from the five EEU member states hit 5.2 million tons worth $1.73 billion to register a 13% YOY rise.
Spokesman of the Islamic Republic of Iran Customs Administration Rouhollah Latifi told Mehr News Agency that Iran exported $367 million worth of goods to Russia during the period, making it Iran's main export destination from among the five EEU member states. This accounts for around 54% of Iran’s exports to EEU.
Russia was followed by Armenia with $164 million (24%), Kazakhstan with $104 million (15%), Kyrgyzstan with $38 million (5.6%) and Belarus with $9 million (1.3%).
EEU’s biggest exporter to Iran with more than $1.34 billion, Russia accounted for 80% of Iran’s purchases from the bloc. It was followed by Kazakhstan with $287.19 million (16.5%), Belarus with $33.73 million (1.9%), Armenia with $10 million (0.5%) and Kyrgyzstan with $5.6 million (0.32%).
“Though the region has been struggling with the COVID-19 pandemic for more than half of this period, trade has not faltered," the IRICA chief was quoted as saying
Latifi added that Iran’s main imports from the Eurasian block are essential goods and animal feed raw materials.
Also known as necessity goods, essential goods are products consumers will buy, regardless of changes in income levels.
Three-Year Provisional Treaty
Iran and the Eurasian Economic Union signed a three-year provisional agreement in Astana on May 17, 2018, for the bloc to welcome Iran into EEU. The arrangement, which lowers or abolishes customs duties, is the first step toward implementing free trade between Iran and the five members of the union.
The average tariff set by EEU on Iranian goods as part of a preferential trade agreement stands at 3.1%, while the figure is 12.9% for EEU goods exported to Iran.
Iran and EEU have listed 862 types of commodities in their three-year provisional trade agreement. As per the deal, Iran will enjoy easier export terms and lower customs duties on 502 items and the same goes for 360 items from the EEU member states.
EEU removed tariffs on imports of 11 Iranian agricultural and food products in April. EEU conveyed the decision to the Trade Promotion Organization of Iran in an official letter.
“Goods that can, from now on, be exported at a zero tariff include potato, onion, garlic, cabbage, carrot, chili, wheat, grains, rice and ready-to-eat meals for kids. The measure taken by EEU in these difficult times when the country is battling the Covid-19 crisis, in addition to economic sanctions, can help boost our production and exports,” Reza Nourani, the head of Iran’s National Association for Agricultural Products, was quoted as saying by Fars News Agency.
The Iran-EEU agreement is deemed especially important, considering the reimposition of unilateral economic sanctions against Iran after US President Donald Trump last year walked out of the nuclear deal the world powers had signed with Tehran in 2015.
The sanctions have been aimed at restricting Iran's trade with other countries to cripple the Iranian economy, in what Iranian officials have termed as "economic war".
Hossein Selahvarzi, the deputy head of Iran Chamber of Commerce, Industries, Mines and Agriculture, says the trade deal is more of a practice in free trade for Iran rather than a short-lived escape from the US-imposed economic sanctions.
The official says free trade is the “rescue route” for Iran’s economy.
“If at the end of the road to joining the EEU, Iran can identify its points of weakness and strength in free trade, we can say it has made the most out of the agreement,” he was quoted as saying by Donya-e-Eqtesad Persian economic daily.
“The level of trade exchanges between Iran and Eurasia could exceed $30 billion [per year],” said Caretaker of Industries, Mining and Trade Ministry Hossein Modaress Khiyabani at the Iran-Eurasia Trade Forum hosted in Tehran earlier this month.
He put the current volume of Eurasia’s foreign trade exchanges at $900 billion.
EEU member states include Russia, Kazakhstan, Armenia, Belarus and Kyrgyzstan.
A forum entitled “Eurasian Economic Union, a Bridge to Free Trade with the World” is scheduled to be held at the Islamic Republic of Iran Broadcasting Conference Center located in Tehran on August 20.
The event, jointly organized by the Trade Training Center of the Ministry of Industries, Mining and Trade, Persian Gulf Studies Center and the Trade Promotion Organization of Iran, will focus on surveying trade and investment opportunities in the Eurasian Economic Union.