The EAEU countries and Iran signed a full-scale agreement on a free trade zone

INTERFAX.RU: The countries of the Eurasian Economic Union (EAEU) signed a full-scale free trade agreement with Iran, which should replace the temporary agreement in force since 2019.

The signing took place on Monday as part of a meeting of the Supreme Eurasian Economic Council in St. Petersburg. The ceremony was signed by the Chairman of the Board of the Eurasian Economic Commission (EEC) Mikhail Myasnikovich, Deputy Prime Minister of the Russian Federation Alexey Overchuk and the Minister of Industry, Mines and Trade of Iran Abbas Ali-Abadi. The agreement was also signed by representatives of Belarus, Armenia, Kazakhstan and Kyrgyzstan.

A temporary agreement on the creation of a free trade zone between the EAEU and Iran was concluded on May 17, 2018 and is valid from October 27, 2019.

A full-format free trade agreement, according to EEC estimates, will allow the EAEU and Iran to increase trade turnover more than threefold - to $18-20 billion from $6.2 billion recorded in 2022, reported EEC Trade Minister Andrey Slepnev. He clarified that such growth can be expected in the next 5-7 years.

With the signing of a full-format agreement, Russian companies will receive preferential access to supplies of 90% of the product range, which covers 99.2% of the volume of current Russian exports to Iran. After signing the agreement, the average duty rate for Russian suppliers to Iran will decrease from 30% to 4.5%. This will allow saving $380 million given the current export volume, Slepnev cited EEC estimates.

For Russian business, the savings on duties on supplies to the Iranian market are estimated at 27 billion rubles (about $300 million) per year, the Ministry of Economic Development of the Russian Federation reported, citing the head of the ministry Maxim Reshetnikov.

Currently, the bulk of Russian exports to Iran are wheat, oils, and metallurgy products; food products are imported from Iran, and supplies in the mechanical engineering sector are increasing. According to Slepnev, in the future there is potential for increasing Russian exports to Iran of grain (in addition to wheat), processed agricultural products, ferrous and non-ferrous metallurgy products, oil and gas complex, timber processing, mechanical engineering (aircraft, shipbuilding, etc.), as well as fertilizers and electronics . From Iran, it is possible to increase the supply of industrial products, textiles, and agricultural products (apples, cucumbers, tomatoes, borscht and others).