Iran and Eurasian Economic Union Negotiations: Upgrading EAEU-Iran Preferential Trade Agreement into a Free Trade Agreement
The EAEU-Iran preferential trade agreement (PTA) implemented on October 27, 2019, offers lower tariffs on 862 commodity types, of which 502 are Iranian exports to the Eurasian Economic Union. This agreement significantly increased the trade volume between Iran and the member countries of the Union. In the period between October 2019 and October 2020, the trade volume grew by more than 84%. Indeed, the trade flows gradually gathered pace and the value of trade between Iran and the members of the EAEU exceeded $1.957 billion in the first five months of the current Iranian calendar year (March 21 – August 22, 2021), marking 96 per cent growth compared to the same period of the previous year. As the agreement was designed to be in effect for 3 years, it is to expire on October 5, 2022. For this reason, the parties have recently begun technical and expert negotiations to upgrade the PTA to a free trade agreement (FTA). If this happens, the number of items of the agreement will rise to at least 8000, which is sure to set off a massive increase in the volume of trade between Iran and the Union. Although there are various capacities and advantages between Iran and the Eurasian Economic Union, there are also problems that need to be taken seriously in the process of upgrading the EAEU-Iran PTA to an FTA. These include: