Iran has been awarded observer status in the Eurasian Economic Union during a meeting in Russia. The Iran-EEU Free Trade Agreement aims to eliminate tariffs on 87% of goods. Trade between Iran and the EEU has significantly increased, with further expansion expected as Iran seeks enhanced cooperation with both Russia and China.
Iran has been officially granted observer status in the Eurasian Economic Union (EEU) during the Supreme Eurasian Economic Council meeting convened in St Petersburg, Russia, on December 26. This significant move is anticipated to bolster trade relations between Iran and the EEU member states, aligning with the provisions of the Iran-Eurasian Economic Union Free Trade Agreement, which aims to eliminate tariffs for 87% of traded goods. Notably, both parties will establish a negative list to protect sensitive domestic sectors, ensuring fair competition.
The confirmation of Iran’s observer status was announced by Maxim Reshetnikov, the Russian Minister of Economic Development, who indicated that this step aims to strengthen collaboration with Iran’s burgeoning market. The previous temporary trade agreement between the EEU and Iran from 2018 to 2023 saw remarkable growth in trade turnover, doubling from $2.7 billion to $5.2 billion within that period. The trend continued into early 2024, with mutual trade showing a year-on-year increase of 12.8%. While exports to Iran rose by 16%, imports increased by 8%.
Bakytzhan Sagintayev, Chairman of the Eurasian Economic Commission’s board, expressed optimism about the forthcoming agreement’s implementation, stating it will promote enhanced economic interaction. With Iran’s accession, the total number of observer countries in the EEU has now reached three, alongside Uzbekistan and Cuba. The EEU aims to facilitate economic cooperation among its member states—Russia, Kazakhstan, Belarus, Armenia, and Kyrgyzstan—along with its observers.
The groundwork for this recent agreement traces back to 2017, when both parties signed a draft agreement regarding preferential export tariffs. This followed a temporary agreement in 2018 that saw the reduction of tariffs on a diversified range of goods. The substantial increase in Iran’s preferential item exports propelled negotiations in 2020 towards establishing a comprehensive free-trade agreement.
Further to this trade expansion, Iran is expected to finalize a comprehensive cooperation agreement with Russia, intended to be signed during President Masoud Pezeshkian’s visit to Russia on January 17. Additionally, the Iranian government is enhancing trade relations with China, as indicated by Foreign Minister Abbas Araghchi’s recent trip to China.
The Eurasian Economic Union (EEU) represents a regional economic bloc established to foster economic integration and collaboration among its member countries. Currently comprising Russia, Kazakhstan, Belarus, Armenia, and Kyrgyzstan, the EEU has extended its reach to include observer states, enhancing trade and economic ties. Iran’s observer status in the EEU is significant as it reflects the growing importance of Iran in regional economic arrangements. The recent agreements between Iran and the EEU, particularly regarding tariff elimination and trade expansion, highlight the strategic objectives of both parties to deepen economic interactions. The historical context of prior agreements laid the foundation for this latest development, setting the stage for greater economic collaboration among the countries involved.
In summary, Iran’s recent acquisition of observer status in the Eurasian Economic Union marks a pivotal development in enhancing economic cooperation in the region. The Iran-Eurasian Economic Union Free Trade Agreement stands to significantly lower trade barriers, fostering expected growth in bilateral trade. With a notable increase in trade turnover observed from previous agreements, the partnership aims to create a favorable environment for commerce. Looking ahead, Iran’s collaboration with both the EEU and China signals its strategic intent to diversify trade relationships in an evolving geopolitical landscape.
Original Source: www.intellinews.com
