EEC forecasts trade with Iran will grow to $18-20 bln, agreement expected Dec 25
MOSCOW. Dec 21 (Interfax) - A full free trade agreement between the Eurasian Economic Union (EAEU) and Iran should be signed in the Supreme Eurasian Economic Council framework on December 25.
The Eurasian Economic Commission (EEC) forecasts the agreement will bolter trade between the EAEU and Iran to $18 billion-$20 billion within five to seven years, EEC Trade Minister Andrei Slepnev said at a briefing on Thursday.
"I hope well be able to sign the free trade agreement with Iran on Monday. We attach a lot of importance to this agreement," he said, adding that this would be Iran's first FTA and that it would open up major opportunities for Russian suppliers.
A provisional agreement between the EAEU and Iran covering 360 of around 12,000 trade positions has been in effect since 2019.
"Even this has enabled us to double trade in three years, from $2.5 billion to $5 billion or more. We had $6.2 billion in mutual trade in 2022. Let's say a limited agreement had such an effect. So the signing of a full agreement will enable us to double trade in quickly. The logical first bar that we are aiming for is something like $18 billion-20 billion. This is something that is quite realistic for us to achieve in the foreseeable future," Slepnev said, adding that this could take five to seven years.
With the full agreement, Russian companies will receive preferential access to 90% of the product range. Slepnev said it covered 99.2% of Russia's current exports to Iran. After the agreement has been signed, the average duties for Russian suppliers to Iran will fall from 30% to 4.5%. This will save $380 million at current export volumes, he said, referring to EEC estimates.
Russian exports to Iran consist mainly of wheat, oils and metals, while food is imported from Iran, and supplies of machine building goods are on the increase. Slepnev said there was potential for Russia to increase exports of grains other than wheat, processed agricultural products and ferrous and non-ferrous metal, oil and gas and forest products as well as machine building goods like aircraft and ships, and fertilizers and electronics. Iran might supply more in the way of industrial products, textiles, and agricultural produce such as apples, cucumbers, tomatoes and others.
"There are a lot of problems, of course. Iran is not a WTO country, so there are regulatory documents that we will need to bring into line with the future agreement in terms of transparency, permits and others since we will in our trade be using the WTO basis that we are all accustomed to. The second point is, of course, settlements, where a certain positive trend is being seen. We have a high share of settlements in national currencies, several channels are already working. Of course, we need to make those channels more effective, but work is underway," Slepnev said.