TEHRAN - The Iranian parliament has ratified a last year preferential trade agreement (PTA) with Indonesia.

The PTA was signed between Iranian President Ebrahim Raisi and his Indonesian counterpart Joko Widodo in Jakarta on May 23, 2023.

Writing on his official X account, Iran’s Deputy Minister of Agriculture Alireza Peimanpak hailed the agreement as the first PTA with an Asia-Pacific country.

The agreement will allow the two Muslim countries to reduce tariffs on exports and imports of certain goods and products.

The PTA agreement will require Iran to lower tariffs on imports of products like processed food and pharmaceuticals, textiles, palm oil, coffee, and tea from Indonesia while Indonesia will give easier and greater access to its market for Iranian oil and chemical products, metals and some dairy products.

Indonesia is one of the world's consumption markets, and this country's market is the main destination of many countries' export goods. Considering Indonesia’s membership in the World Trade Organization (WTO) and low tariffs for imports to this country, Iran can also take advantage of the economic status of Indonesia and expand its trade with this country.

In recent years, Iran has started to sign preferential trade agreements with other countries to expand its economic relations through the reduction of tariff rates. A clear example of this policy is the trade agreement with the Eurasian Economic Union (EAEU) and Pakistan, based on them zero tariffs are to be applied on at least 100 items.

The data of the last decade of Iran's trade with Indonesia show that the peak of Iran's trade relations with this country was in the Iranian calendar year 1400 (ended on March 20, 2022), which can be a turning point in the history of trade between the two countries.

Iran's 10-year exports to Indonesia show that in 1400, the highest value of exports to Indonesia occurred in the last ten years, which was $1.081 billion.

Iran’s export to Indonesia in the last ten years shows an upward trend, as the exports to this country have increased from 60 million dollars in 1392 to more than one billion dollars in 1400. This is a sign of the potential of relations between the two countries in the economic area.

EF/