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Eurasian Economic Union starts working on a free trade zone with Iran

Eurasian Economic Union starts working on a free trade zone with Iran

12/24/2015

On December 23, Member States of the Eurasian Economic Union (EAEU) together with Iran launched a joint research on the prospects of concluding the free trade agreement. This was announced in Tehran by the Minister in charge of Trade of the EEC Andrey Slepnev and the Minister of Industry, Mines and Trade of Iran Mohamad Reza Nematzade.

The established Joint Research Group (JRS) will assess the prospects of concluding such an agreement, identify opportunities for maximizing economic benefits, give specific proposals on its possible format, the framework of obligations of the Parties and the depth of cooperation in specific areas.

The Minister in charge of Trade of the EEC Andrey Slepnev said: "Iran is a strategic partner for us. The anticipated lifting of international sanctions will create the preconditions for the formation of the country's new regional economic growth, while the reintegration of the Islamic Republic into the global economy will allow increasing cooperation within the framework of the "Big Eurasia." In particular, there will be additional prerequisites for the creation of transport corridors in the directions of India, Pakistan, Iraq, as well as the formation of the "North-South" Eurasian transport space."

The task of the Joint Working Group is to give concrete proposals in order to bring trade and economic relations between Iran and the EAEU Member States to the new level, to offer an agreement format, which will give the possibility to fully implement the potential of joint economic development. With this purpose, experts need to analyse in detail the specifics of conducting business and mutual trade.

The Eurasian Economic Union and Iran expect a further increase of bilateral trade turnover and diversification of economic cooperation spheres. The Minister in charge of Trade of the EEC Andrey Slepnev said: "For the period from January to October in 2015, the exports of goods from the EAEU Member States to Iran exceeded USD 1.4 billion, while the imports of goods exceeded USD 445 million. Member States of the Eurasian Economic Union supply to Iran the following agricultural goods: wheat, barley, corn, vegetable oils. In addition, supplies of the following manufactured goods are carried out: rolled steel and trucks, timber, paper, synthetic fibers. Electricity is also supplied. Imports from Iran are mainly presented by vegetables, fruits, cement and petrochemicals. It is obvious that exports and imports can be more diversified, and the range of goods and services can be much wider." The total turnover of trade in services in 2014 between the EEC and Iran amounted to approximately USD 700 million.

During the meeting, the Ministers also noted that the joint work of the group would make a significant contribution to the development of relations between the EAEU and Iran.

The decision to establish the Joint Research Group together with Iran has been adopted by the Council of the Eurasian Economic Commission on August 21, 2015.

For reference

The work of the Joint Research Group (JRS) is a preparatory stage for negotiations on establishing a free trade zone. Within the JRS framework, experts study the economic structure of countries and the parameters of foreign and mutual trade, as well as search for areas of mutual concern. Following the results of work, JRS submits a detailed report containing conclusions on the feasibility of negotiating on FTA. On the basis of this report, the Presidents of the EAEU Member States decide on the feasibility of negotiations.