Iran-Eurasian Economic Union FTA Cites 840 Products, With Trade Up 27%
The Iran-Eurasian Economic Union (EAEU) Free Trade Agreement has now been operational since 27th October, and although at this stage a temporary agreement, is expected to become permanent in the next three years. Veronika Nikishina, the minister for trade of the Eurasian Economic Commission stated on Sunday that the EAEU nations “Were interested in trade with Iran even when there was not such a trade agreement on reduction of tariffs, with exports of Iranian products to these countries rose 27 percent in 2018.”
The Eurasian Economic Union includes Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia, and sits in the geographic space between China and the European Union.
On the EU side, a total of nine EU countries have worked their way around the US sanctions on Iran by developing and implementing the “Instrument in Support of Trade Exchanges” (Instex). This was developed by France, Germany and the United Kingdom who were joined last week by Belgium, Denmark, Finland, the Netherlands, Norway and Sweden, to join Instex as shareholders. Instex functions as a clearing house that allows Iran to continue to sell oil and import other products or services in exchange, and was developed after the United States disabled Iran from the global SWIFT payment network. Instex has not yet enabled any transactions, and there is sure to be a diplomatic argument between the United States and the countries concerned when it does.
Meanwhile, the EAEU FTA and business with China remain Iran’s current source of trade and revenue. The FTA doesn’t just deal with oil and gad supplies however. About 840 commodity items are subject to preferential tariffs, which means tariffs on some goods are reduced and for some commodities tariffs are levied.
Iran’s deputy industry minister, Hossein Modares Khiabani has also said that the value of trade between Iran and the EAEU will rise to trade worth over US$30 billion through the establishment of required infrastructures in banking, insurance, customs and transportation sectors. Iran is already creating the North-South International Transport Corridor, which will link the country via shipping routes to Western India, westwards to Europe and north to Azerbaijan and Russia.