Over the past decade and during the coronavirus pandemic, China has dominated Iran`s foreign trade. But Tehran has also recently shaken its economic diplomacy with a look to the north and east. On 27 April, an interim free trade agreement (FTA) between Iran and the Eurasian Economic Union (EAEU) came into force, an organization made up of Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. Signed nine days after the Trump administration exited the Iran nuclear deal in May 2018, the free trade agreement will be permanent within three years if the talks work. TEHRAN – The implementation of the free trade agreement between Iran and the Eurasian Economic Union (EAEU) has been officially notified to Iran`s customs authorities, as announced Thursday by the IRIB. The trade agreement between Iran and the Eurasian Economic Union officially entered into force on 27 October. In August, Iran`s Ambassador to Russia, Mehdi Sanaei, attended a meeting with a senior EAEU official to conclude an agreement on the creation of a free trade area between Iran and the Regional Union. The notice also included a list of 380 items subject to the trade agreement. This is the first regional economic agreement of its kind for Tehran, whose application for membership of the World Trade Organization was frozen in 1996.
The Islamic Republic seems to regard the EAEU and its 183 million inhabitants as an important market – and a useful instrument for easing US sanctions. The agreement applies preferential tariffs to 862 categories of agricultural and industrial products, 502 of which are rampant in Iran. These rates vary and are, in some cases, completely abolished; On average, Iran continues to impose higher tariffs on incoming EEU products than the other way around. At the same time, non-preferential customs exchanges continue. The agreement includes 862 products, 360 of which are related to the EAEU and 502 in Iran. Hamid Zadboum, director of the Organization for the Promotion of Trade in Iran (TPOI), said the EAEU agreement marks the beginning of free trade and business with Eurasia; Preparations for free trade with the Eurasian area will be put in place one year after the implementation of this agreement. Iran has entered its new era of free trade from the Eurasian Economic Union and signed an initial agreement with Russia and Kazakhstan to extend cooperation with these countries under a recently signed agreement with the Eurasian Economic Union (EAEU). According to reports, the Customs Administration of the Islamic Republic of Iran (IRICA) has announced to all customs offices throughout the country that they will declare the official implementation of the agreement. “The first trade agreement is the transit and exchange of wheat.” This was stated on Sunday by the deputy head of the Iranian Trade and Agriculture Organization, Ali Akbar Mehrfard. He said the volume of trade between Iran and the Eurasian states would increase under the interim trade agreement signed between Iran and the Eurasian States.