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EAEU and Iran pass on to preferential trade conditions

EAEU and Iran pass on to preferential trade conditions

10/28/2019

The Interim Agreement leading to the formation of a free trade area between the Eurasian Economic Union (EAEU) and Iran came into force on October 27.

Earlier on August 28, Tigran Sargsyan, Chairman of the Board of the Eurasian Economic Commission (EEC), and Mehdi Sanaei, Ambassador Extraordinary and Plenipotentiary of the Islamic Republic of Iran to the Russian Federation, exchanged notes on completing the required procedures at the meeting held in the EEC headquarters.

"We see the growing interest of the EAEU business community and Iran in trade development. By the end of 2018, the Iranian exporters boosted exports to our Union by more than 27%, and the trade turnover between our countries amounted to more than 2.7 bln US dollars. In turn, in January-August of this year, supplies from the EAEU to Iran increased by more than 17%, and the trade turnover during this period exceeded 2 bln US dollars. We are confident that the Agreement will provide conditions required for strengthening this trend", – Tigran Sargsyan said.

The Trade Agreement entered into force provides for limited frequency coverage, but includes almost all major traded products, which account for 55% of the EAEU total exports (trade statistics for 2016-2018). These are agricultural and industrial commodity groups. The preferential import coverage accounts for 49% of Iran's total exports to the EAEU.

The list of goods for which the EAEU exporters will receive preferences includes meat and fat-and-oil products, certain types of confectionery and chocolate as well as metals, cosmetics, certain types of electronic and mechanical equipment.

The Iranian side will be granted tariff preferences on the expanded list of foodstuffs, primarily, vegetables, fruits, dried fruits as well as construction materials, dishes, carpets, some products made of non-ferrous metals.

In addition to the fact that the Agreement allows saving on customs duties, the document creates additional incentives for developing trade relations through the provision of transparent and predictable mutual trade environment based on the WTO rules. In particular, the parties to the Agreement will provided with the most-favored-nation and national treatment for all goods traded between the EAEU and Iran; all fees associated with the import of goods should not exceed the cost of services rendered for customs clearance; unreasonable non-tariff measures restricting trade should not be applied to the goods listed in the Agreement. Such requirements are among the most important in the WTO law and ensure predictability of the trade regime between the countries.

Both the EAEU countries and Iran attach great importance to developing mutually beneficial cooperation. This is evidenced by the participation of Hassan Rouhani, President of the Islamic Republic of Iran, in the session of the Supreme Eurasian Economic Council held on October 1 this year in Yerevan.

For reference

The Interim Agreement leading to formation of a free trade area between the Eurasian Economic Union and its Member States, on the one part, and the Islamic Republic of Iran, on the other part, was concluded on May 17, 2018 within the framework of the Astana Economic Forum. Afterwards, the Agreement was ratified by the EAEU countries and Iran. The decision to bind the Union by the Agreement was made by the Supreme Eurasian Economic Council at the level of the heads of states.

 

The Agreement as well as background information on its main provisions are available on the website of the Eurasian Economic Commission.