Hindustan Times - 04 June 2021
Eurasian Economic Commission: free trade talks with Iran to start soon
Negotiations on a full-fledged free trade zone between the Eurasian Economic Union and Iran are set to start soon.
The press service of Eurasian Economic Commission informed BelTA of the decision following a meeting between Chairman of the EEC Board Mikhail Myasnikovich and Iran’s energy minister and co-chairman of the Russian-Iranian intergovernmental commission on trade and economic cooperation, Reza Ardakanian, on the sidelines of the St. Petersburg International Economic Forum.
“The EAEU made the appropriate decisions regarding the launch of negotiations in December 2020. The EAEU member states are currently finalizing the mandate for the negotiations,” Myasnikovich said.
“We expect to complete the necessary procedures and prepare for the talks by the end of June 2021,” he added.
EAEU and EEU both refer to the Eurasian Economic Union.
The EEC official said the interim free trade agreement between EEU and Iran has already become an effective tool for advancing cooperation.
“In 2020, the EEU-Iran trade totaled $2.9 billion, growing by 18.5% over 2019. In Q1 2021, the EAEU export to Iran rose by 43.5% year-on-year and import increased by 20%. The EAEU-Iran trade went up by over a third and totaled $1.15 billion. This was possible thanks to our joint work,” Myasnikovich said.
The parties also spoke in detail about the most promising infrastructure projects of EEU member states and Iran, including the North-South International Transport Corridor, and about other joint initiatives.
The interim free trade agreement between EEU member states and Iran was signed on 17 May 2018 and entered into force on 27 October 2019. The parties shall enter into negotiations on signing a full-fledged free trade agreement in line with Article 1.3 of the interim agreement.
Iran Chamber of Commerce, Industries, Mines and Agriculture recently reviewed Iran’s trade with the Eurasia Economic Union from the fiscal 2016-17 to the fiscal 2020-21.
The study shows the highest volume of trade between the two sides during the period was in fiscal 2019-20 and the lowest was in fiscal 2016-17.
The highest trade balance was registered in the fiscal 2020-21 with a deficit of $93 million.
Iran and EEU signed a three-year provisional agreement in Astana, Kazakhstan, on May 17, 2018, for the bloc to welcome Iran.
The arrangement is the first step in implementing 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 free trade agreement.
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 the import of 11 Iranian agricultural and food products in April. The union conveyed the decision to the Trade Promotion Organization of Iran in an official letter.
“These 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.
Iran Remains on EEU’s GSP List After Recent Revision
Lists of the developing and least-developed states that have remained beneficiaries of the Eurasian Economic Union’s Generalized System of Preferences, finalized by Eurasian Economic Council on March 5, has recently been released and Iran is one of the countries named in the list, according to the director of EEU Affairs Desk with the Trade Promotion Organization of Iran.
“Many countries have been removed from the list, among them some of Iran’s potential rivals in EEU’s lucrative market, namely Turkey, China, India, South Korea, the littoral states of Persian Gulf, Iraq, Brazil, Vietnam, Hong Kong, Indonesia, Lebanon, Singapore, Thailand and Malaysia.
GPS provides developing countries a 25% tariff discount for numerous commodities, most of which are agricultural products and the combination of the two factors gives Iran a high chance of securing a foothold in the bloc,” Elham Haji-Karimi was also quoted as saying by ILNA.
Based on the data now available on the EEC website, the official said, the number of developing countries in the revised list has shrunk from 103 to 29 and that of least-developed ones from 50 to 48.
The Generalized System of Preferences, instituted in 1971 under the aegis of United Nations Conference on Trade and Development, has contributed over the years to creating an enabling trading environment for developing countries UNCTAD writes on its website.
The following 13 countries grant GSP preferences: Australia, Belarus, Canada, the European Union, Iceland, Japan, Kazakhstan, New Zealand, Norway, the Russian Federation, Switzerland, Turkey and USA.
Haji-Karimi said traders need to abide by certain regulations to benefit from GPS.
“Tariff preferences shall be granted to goods originating in developing countries. Therefore, exporters need to obtain certificates of origin from provincial chambers of commerce. They have to keep hold of their trade documents for at least three years for accountability reasons in case further inquiry is required,” she concluded.