TEHRAN – The head of Iran’s Trade Promotion Organization (TPO) said on Thursday that the preferential trade agreement (PTA) between Iran and the Eurasian Economic Union (EAEU) has canceled customs tariffs on 87 percent of the goods exchanged between the two sides, IRNA reported.

Mentioning the fact that the two sides are currently finalizing a free trade agreement (FTA) as well, Mohammad Ali Dehghan Dehnavi said: “The free trade agreement with the member countries of Eurasia will facilitate and increase the volume of our trade exchanges.”

According to Dehghan Dehnavi, Iran’s observer status in the EAEU has also been approved and will be officially announced at the union’s next assembly.

Reducing costs, creating opportunities for joint ventures, and creating new markets have been achieved through foreign trade agreements, he said.

Earlier this month, Dehghan Dehnavi said the Islamic Republic’s trade with the EAEU has increased by 2.5 times over the past four years.

“Four years ago, we entered a preferential trade agreement with Eurasia, and tariffs on exported goods were reduced or zeroed, during this period, the trade with the member countries of this union has increased 2.5 times,” he said in a meeting with the members of the Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA) on October 6.

The official said the FTA with EAEU has been reached and is being pursued by the members of the union to be implemented.

“We also signed the free trade agreement with the members of the Eurasian Economic Union and the agreement is under revision by the parliament. Three of the five Eurasian member countries have already approved the agreement,” the official said.

“Eurasia is Iran's first major experience in free trade based on which 87 percent of tariffs [on export goods] are removed, businessmen must prepare themselves for new competition in this market. Besides, the EAEU member countries also want to supply their goods to Iran,” he added.

The Eurasian Economic Union was established in 2015 at the initiative taken by the Russian Federation, Kazakhstan, and Belarus.

Afterward, the Republic of Armenia and Kyrgyzstan joined the Union.

Iran and EAEU reached a preferential trade agreement in 2018, based on which about 862 commodity items are currently subject to preferential tariffs.

The agreement came into effect on October 27, 2019.

Earlier this month, Iranian Industry, Mining, and Trade Minister Mohammad Atabak and Andrey Slepnev, the minister in charge of trade of the Eurasian Economic Commission (EEC), discussed ways of expanding economic cooperation in a meeting on the sidelines of the Eurasian Business Forum in Armenia.

In the meeting, the Iranian side emphasized the need to establish an insurance company under the Eurasian Economic Union to provide the necessary guarantees regarding Iran’s technical and engineering exports to the region.

The two sides also discussed the increase in trade between Iran and the Eurasian Economic Union and the implementation of the FTA.

Another focal point of the negotiations was the unification of the standards of the member countries of the EAEU with Iran to facilitate exports to the union.

In this meeting, the Iranian industry minister invited Slepnev to visit the third round of the Eurasia Exhibition in Iran.

The 3rd Eurasian International Exhibition in Iran is scheduled to be held at Tehran Permanent International Fairgrounds from December 3 to 6.

The periodic economic forum of the Eurasian Union was held on September 30 and October 1 in Yerevan, Armenia, and Iran was the special guest of this meeting.

The value of Iran’s exports to the members of the EAEU increased by 16 percent in the first five months of the current Iranian calendar year (March 20-August 21) as compared to the same period last year, according to the head of the Islamic Republic of Iran Customs Administration (IRICA).

Mohammad Rezvanifar said the Islamic Republic exported 2.2 million tons of commodities worth $748 million to the members of the Eurasian Economic Union in the mentioned five months, IRIB reported.

Exports to the EAEU also increased by 35 percent in terms of weight, according to Rezvanifar.

Meanwhile, Iran imported 3.9 million tons of goods valued at $1.6 billion from the members of the Eurasian Economic Union in the said five months.

EF/MA