A temporary Free Trade Area between the EAEU and Iran became effective

The Interim Agreement on the Free Trade Area between the member States of the Eurasian Economic Union and the Islamic Republic of Iran entered into force on October 27, 2019, Kazpravda.kz reports.

According to the press service of the Ministry of Trade and Integration of the Republic of Kazakhstan, an interim agreement leading to the formation of a Free Trade Area between the EAEU countries and Iran was signed on May 17, 2018 at the Astana Economic Forum. October 27, 2019 the document comes into force.

“The conclusion of such agreements is one of the instruments to promote export to world markets. The agreement with Iran will open access for our products to the market of this country with a population of more than 80 million people. It should be noted that Iran is one of the few countries with processed goods based on mutual trade", - Vice Minister of Trade and Integration Zhanel Kushukova  said within the margins of the Eurasian Intergovernmental Council meeting.

The press service clarified that within the framework of the agreement, significant liberalization of the conditions for access of Kazakhstani products to the Iranian market has been achieved. The current level of tariff protection in this country is considered as one of the highest. The agreement would allow reducing or freezing duties at the current level for a number of goods that are of export interest to Kazakhstan. Moreover, the Iranian side provides a greater number of concessions in quantitative terms.

Thus, in accordance with the Agreement, Iran provides Kazakhstan and other EAEU countries with a reduction in import duties regarding 864 products (including 262 agricultural products, 602 manufactured goods).

It will be possible to import to the Iranian market at reduced rates such goods as beef and mutton meat (duty reduction from 26% to 5-10%), legumes (from 55% to 5-10%), vegetable oil (from 20% to 10%), macaroni and confectionery (from 55% to 14-20%), rolled steel (from 20% to 15%) and others.

In turn, the EAEU countries will reduce import duties to 502 goods: 126 agricultural products, 376 manufactured goods. These are goods we are interested in importing, since many of them are not produced on the territory of the Republic of Kazakhstan.

The agreement is valid for 3 years. The document provides for the possibility of negotiations on a permanent agreement on a Free Trade Area between the EAEU and Iran.

According to the results of 2018, the volume of mutual trade with Iran amounted to $ 516.3 million, of which 82.6% ($ 426.7 million) was our export to Iran (import – $ 89.5 million). The main export goods are barley, rolled steel, rapeseed and meat of domestic sheep.

For 8 months of 2019, trade between Kazakhstan and Iran amounted to $ 226.2 million, of which 77.1% or $ 174.3 million are exports to Iran, imports – $ 51.9 million. It should be noted that in 2019, Kazakhstan increased the supply of barley to Iran by $ 22.8 million. Also in 2019, deliveries of goods began that were not carried out for the same period of 2018. These are beef, rapeseed oil, small cattle.

It should be reminded the initiative to create a Free Trade Area with Iran was suggested by Elbasy Nursultan Nazarbayev at the summit of the heads of the Caspian states in 2014.

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