The Interim Agreement enabling formation of a
free trade area between the Eurasian Economic Union (EAEU) and the Islamic
Republic of Iran was signed on May 17 within the framework of the Astana Economic Forum.
The Agreement was affixed with the signatures of the Chairman of the Board
of the Eurasian Economic Commission (EEC) Tigran Sargsyan, the Vice Prime
Minister of the Republic of Armenia Tigran Avinyan, the First Deputy Prime
Minister of the Republic of Belarus Vasily Matyushevsky, the First Deputy Prime
Minister of the Republic of Kazakhstan Askar Mamin, the Vice Prime Minister of
the Kyrgyz Republic Zamirbek Askarov, the Deputy Head of the Government of the
Russian Federation Dmitry Kozak and the Minister of Industry, Mining and Trade
of the Islamic Republic of Iran Mohammad Shariatmadari.
The signing ceremony coincided with the panel discussion “EAEU – Iran:
New Prospects of Cooperation in Preferential Trade Context”, where its
participants discussed effects from conclusion of the agreement, new
opportunities opened for exporters from the Union and Iran as well as areas of
deepening of cooperation between the parties.
Opening the discussion Tigran Sargsyan noted
that this document had become significant for the EAEU, because it implied two
stages of formation of the free trade area (FTA). At the current stage, the
Interim Agreement will apply. It is planned to come to a fully-functional
agreement on the FTA between the EAEU and Iran in three years. The Agreement on
the FTA will cover almost the entire commodity nomenclature. Looking forward,
commodity turnover may increase by one and a half times (150%).
The Chairman of the EEC Board Tigran Sargsyan
thanked all the parties to the negotiation process – representatives of the
five countries of the Union, business community and the Commission employees
who, under the supervision of the EEC Minister in charge of Trade Veronika
Nikishina, had done “tremendous
substantive and organizational work and got a result satisfying all parties to
the agreement”, as well as Iranian partners – “for demonstrating flexibility upon attainment of so grand-scale and
meaningful arrangements”.
“Nowadays, the agreement
includes a first-priority list of goods with the import duties thereupon in
mutual trade to be reduced or cancelled after the document comes into force, - told the Chairman of the EEC
Board. – The agreement covers 50% of the volume
of mutual trade which is certainly indicative of significance and serious
nature of the arrangements”.
Tigran Sargsyan named several key advantages to
be obtained by entrepreneurs of the Union countries and Iran upon entry into
force of the agreement. One of such advantages is savings in payment of import
customs duties.
The second advantage is transparent and
predictable mutual trade environment. “Apart
from reduction of import duties the Interim Agreement stipulates for compliance
by its parties with the fundamental principles of international trade. It
prescribes a scheme similar to the WTO regulations which imposes obligations
and requirements on Iran notwithstanding the fact that our partners are not
members of the WTO”, - the Chairman of the EEC Board reported.
The parties also reached an understanding obliging
them not to apply unreasonable non-tariff measures restricting trade with
regard to the goods listed in the agreement.
Tigran Sargsyan invited economic operators to
actively use their opportunities and the created regulatory environment. “It is necessary to develop trade in all the
products, because in the mid-term it will also serve as a criterion suggesting
which goods will become subject to liberalization at the second stage”, -
the Chairman of the EEC Board addressed the business community.
The First Deputy Prime Minister of the Republic
of Kazakhstan Askar Mamin emphasized the positive dynamics of commodity
turnover between Kazakhstan and Iran in Q1, 2018. “Increase in trade volumes in the first quarter before entry into
force of the agreement amounted to 72%”, - the First Deputy Prime Minister
told.
Askar Mamin also mentioned that Kazakhstan is
ready to provide for efficient logistics for goods supplies from Iran to the
EAEU market and from the Union to Iran. For illustrative purposes he referred
to current logistics projects in the sphere of railroad transportation and port
infrastructure.
The Vice Prime Minister of the Republic of
Armenia Tigran Avinyan mentioned historically established good-neighbour
relations with Iran. “Armenia is the only
country of the EAEU which has land border with Iran, and we will try to use it
to the benefit of Armenian, the EAEU and Iranian market”, - he said.
Tigran Avinyan reported that cooperation with
Iran would involve the free economic area (FEA) “Meghri”. It provides an
opportunity to arrange for joint production at its platform. Manufacturers from
Iran may export raw materials to the FEA and obtain finished products escaping
bureaucratic procedures for supplies to the EAEU market.
The representative of Armenia mentioned
existing experience as an example of cooperation with Iran – Armenia manufactures
food products in compliance with Iranian “halal” standards.
“The first unique
experience of establishing multilateral relations with the Islamic Republic of
Iran has rather good prospects. We have reached very good mutual results”, - the First Deputy Prime Minister
of the Republic of Belarus Vasily Matyushevsky stated.
The representative of Belarus underlined
significance of the agreement for the implementation of export strategy of the
Republic. “Our mutual trade has been
developing rather dynamically since 1993. In 2017, mutual commodity turnover
between Belarus and Iran raised threefold. A very positive dynamics was also
observed in Q1, 2018”,
- Vasily Matyushevsky reported.
Investment cooperation is developing along with
the traditional trade and economic cooperation. Belarus invests into machine
engineering in Iran. Iran implements a number of large logistics projects in
Belarus.
The Vice Prime Minister of the Kyrgyz Republic
Zamirbek Askarov emphasized advantages to be obtained by the Republic upon
entry into force of the Interim Agreement. “Trade
volumes between Iran and Kyrgyzstan are yet insignificant but we witness a
trend for mutual trade growth. Kyrgyzstan may supply to Iran pasta, dairy
butter, electronic incandescent lamps and other products”, - Zarimbek Askarov
reported. He mentioned the importance of including into the agreement the parties’
obligations to provide for the most-favoured nation treatment.
The Deputy Head of the Government of the
Russian Federation Dmitry Kozak welcomed signing of the agreement. He called
business to be its key beneficiary. “The
document stipulates a specific article for establishing business dialogue. The
exact format of this platform will be determined in the near future with the
participation of businesses”, - Dmitry Kozak said.
The Minister of Industry, Mining and Trade of
the Islamic Republic of Iran Mohammad Shariatmadari mentioned high potential of
the EAEU countries and Iran as actors of the world economy.
“Iran sets an
objective to ease export procedures, to remove obstacles, to develop logistics
and to establish stable trade and economic relations between the EAEU and Iran, – stated the Republic’s representative.
– We focus on the second stage which will
serve as guarantor of the development of our relations in the future.”
For reference
The EAEU list will
include meat and fat and oil products, certain types of confectionery and
chocolate as well as metals, cosmetics, and certain types of electronic and
mechanical equipment.
The Iranian party will
be granted tariff preferences for an extended list of food products, in the
first place, vegetables, fruit, dried fruit as well as construction materials,
dishware, carpets, some articles made of non-ferrous metals.
The average level of
import duty rates of Iran for industrial goods will decrease from 22.4% down to
15.4%, that is by 7 p.p., and that of the Union – from 8% down to 4.7%, that is
by 3.3 p.p. Iran will reduce duties for agricultural goods on the average from
32.2% down to 13.2%, that is by 19 p.p., and the Union – from 9.6% down to
4.6%, that is by 5 p.p.