Iran to sign free trade agreement with Eurasian Economic Union in 2 months

Iran to sign free trade agreement with Eurasian Economic Union in 2 months
/ bne IntelliNews
By bne IntelliNews November 22, 2023

Iran and the member states of the Eurasian Economic Union (EEU) have agreed on the text and list of goods for a free trade deal. 

An official from the Trade Promotion Organisation of Iran (TPO), Mohammad Qanadzadeh, was quoted by Fars news agency as saying on November 21 that Iran is set to sign the Free Trade Agreement (FTA) with the union within the next two months.

Qanadzadeh highlighted that upon parliamentary approval, the agreement is slated to take effect in the upcoming Persian calendar year, beginning in March 2024.

Under the terms of the agreement, 87% of goods will be traded between Iran and the union with zero tariffs. However, Qanadzadeh noted the existence of a negative list, stating that 13% of Iranian goods, such as automobiles, textile industries, agricultural products, and certain home appliances, are excluded from the free trade agreement.

The official emphasised that Iran's trade potential with EEU member countries currently stands at $30bn.

Historically, Iran and the EEU have operated under a temporary agreement, subject to extensions, pending the finalisation of the FTA. The temporary arrangement has entailed reduced duties on 360 goods, covering trade volumes of approximately $5bn. It has also led to a reduction in customs tariffs for over 90% of the goods traded between the two sides.

Qanadzadeh disclosed that the 2nd Eurasia Expo 2023 is scheduled to take place from December 4-7 at the Tehran International Exhibition Center. He specified the participation of 80 Iranian companies and 20 Eurasian companies in the expo, spanning various sectors including agriculture, food, industry, automotive, chemical and petrochemical, home appliances, wire and cable, transportation, investment, oil and gas, minerals, medicine and medical equipment, paint and resin, and mining.

On the sidelines of the expo, meetings of the joint commission with Russia, the joint commission with Kazakhstan, and the joint commission with Oman, along with the working group of industry, mining, and trade with Russia, are planned, Qanadzadeh added.

For the initial seven months of the current Persian calendar year (March 21-October 22), Iran's trade with EEU member states amounted to 8.11mn tonnes, valued at $4.25bn. Iranian exports reached 2.41mn tonnes (a 48% year-on-year increase) worth $921.84mn (up 22% y/y), while imports totaled 5.69mn tonnes (a 37% y/y increase) worth $3.33bn (up 31% y/y).