Rus­sia ap­proves draft law on EEU-IRAN free trade deal

Iran Daily - - Domestic Economy -

The Rus­sian gov­ern­ment said on Satur­day that it had ap­proved a draft law for rat­i­fi­ca­tion of the pro­vi­sional free trade deal be­tween the Eurasian Eco­nomic Union (EEU) and Iran, which is now the sub­ject to parliamentary ap­proval.

The five-na­tion eco­nomic bloc of Ar­me­nia, Be­larus, Kaza­khstan, Kyr­gyzs­tan and Rus­sia struck the pro­vi­sional free trade deal with Iran on the side­lines of the As­tana Eco­nomic Fo­rum on May 17, Sput­nik re­ported.

The pro­vi­sional agree­ment is ex­pected to last for three years, with the sig­na­to­ries com­mit­ting them­selves to en­ter into talks on a full-fledged free trade deal within a year since the ac­cord’s en­try into force.

“Ap­prove the draft fed­eral law ... and ta­ble it in the State Duma in ac­cor­dance with the es­tab­lished pro­ce­dure,” the gov­ern­ment said in a state­ment, posted on its of­fi­cial web­site.

The pro­vi­sional agree­ment will cover a lim­ited set of goods to en­sure swift adap­ta­tion of ex­porters to a new level of re­la­tions.

The agree­ment is aimed at re­duc­ing tar­iffs and also re­mov­ing non-tar­iff bar­ri­ers to in­crease pre­dictabil­ity and boost mu­tual trade.

In May, Ira­nian Min­is­ter of In­dus­try, Mine and Trade Mo­ham­mad Shari­at­madari said Iran has be­come a part­ner of a great eco­nomic union. The agree­ment will bear pos­i­tive fruit for the whole re­gion.

Shari­at­madari said that his coun­try, which ex­ports goods worth $20 bil­lion per year, is a good part­ner for the EEU and “is in­ter­ested in the sim­pli­fi­ca­tion of ex­port pro­ce­dures, the elim­i­na­tion of trade bar­ri­ers and the es­tab­lish­ment of sta­ble eco­nomic and trade re­la­tion­ships”.

The chair­man of the board of the Eurasian Eco­nomic Com­mis­sion, Ti­gran Sargsyan, hailed the agree­ment signed by Iran and the EEU, which he por­trayed as “the first step to­ward es­tab­lish­ing a new type of eco­nomic re­la­tion­ship” be­tween the par­ties.

“The Ira­nian mar­ket is very large and dy­namic and that is why it is so ap­peal­ing to our busi­ness lead­ers,” he said.

“Of course we are wor­ried, but we have our own eco­nomic in­ter­ests and we will at­tempt to im­ple­ment all of the terms of the agree­ment,” Sargsyan said.

Ac­cord­ing to Rakhim Oshak­bayev, the di­rec­tor of the Talap Cen­ter and a Kazakh po­lit­i­cal sci­en­tist who spe­cial­izes in study­ing the EEU, the agree­ment be­tween Iran and the EEU is a con­se­quence of the with­drawal of the United States from the Iran deal.

“I think this is pos­i­tive and it would mean that the for­eign pol­icy of the United States is not com­pletely ef­fec­tive,” he said.

The EEU bloc was es­tab­lished in 2015, af­ter it su­per­seded the Eurasian Eco­nomic Com­mu­nity that func­tioned from 2000 to 2014.

The union has an in­te­grated sin­gle mar­ket of 183 mil­lion peo­ple and a gross do­mes­tic prod­uct of over $4 tril­lion.

Ar­me­nia also wel­comed the free trade agree­ment be­tween the EEU and Iran.

Ar­me­nia, the only EEU mem­ber state in the Cau­ca­sus, has been po­si­tion­ing it­self as a trade part­ner to Iran via a free trade zone on its south­ern bor­der.

Ar­me­nia’s Prime Min­is­ter Nikol Pashinyan said We hope that it will stim­u­late our com­mer­cial ties [with Iran,]” he ex­pressed. “It opens up op­por­tu­ni­ties. We hope to utilize those op­por­tu­ni­ties in full.”

Ar­me­nian Min­is­ter for Eco­nomic De­vel­op­ment Artsvik Mi­nasian said the deal would al­low Ar­me­nia to serve as an im­por­tant tran­sit route be­tween Iran and the wider EEU mar­ket. “This is also an op­por­tu­nity to man­u­fac­ture some prod­ucts in the Meghri free-trade zone,” he told Azatu­tyun, Ar­me­nian news ser­vice.

Meghri, Ar­me­nia’s bor­der town with Iran, has be­come an im­por­tant part of Ar­me­nia’s eco­nomic strat­egy af­ter a trade hub has opened there in De­cem­ber, 2017. The hub of­fers gen­er­ous busi­ness terms for com­pa­nies op­er­at­ing there.

“Com­pa­nies op­er­at­ing in the Meghri will be ex­empt from profit tax, value added tax, ex­cise tax and cus­toms fees,” the provin­cial gover­nor’s press sec­re­tary, Vaz­gen Sa­gatelyan, told Eurasianet re­cently.

“We ex­pect the zone to at­tract 50 to 70 com­pa­nies in the com­ing years, in­vest­ing $100-130 mil­lion and cre­at­ing more than 1,500 jobs.”


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