Iran and the Eurasian Economic Union (EAEU) have signed a major agreement to start free trade some six years after Tehran joined the bloc in a bid to diversify its trade partners amid sanctions imposed by the West.
The office of Iran’s official news agency (IRNA) in Moscow said in a Monday report that the free trade agreement between Iran and the EAEU had been signed during a meeting of the Supreme Eurasian Economic Council in the Russian city of Saint Petersburg.
Iran’s Minister of Industry, Mine and Trade Abbas Ali-Abadi and Chairman of the Board of the Eurasian Economic Commission (EEC) Mikhail Myasnikovich signed the agreement.
The deal is the result of two years of intensive expert negotiations between Iran and the Russia-led EAEU, said the IRNA report, adding that deputy prime ministers of Russia, Armenia, Belarus, Kazakhstan along with Kyrgyzstan’s deputy head of cabinet also put their signatures on the EAEU-Iran Free Trade Agreement.
Officials from Iran and five EAEU members had prepared a text of the agreement during a final round of negotiations on Sunday, said the report.
The agreement should now be ratified by parliaments of the six EAEU members in order to go into effect.
IRNA’s correspondent in Saint Petersburg said the agreement will allow Iran and EAEU members to cut to zero the export and import tariffs for some 87% of the goods they trade, adding that trade for the remaining 13% of the commodities and goods will still be carried out under a tariff system.
Iran and the EAEU had signed a three-year preferential trade agreement (PTA) in 2019, some five years after Iran was invited to join the bloc.
The PTA allowed Iran to offer tariff reduction on 380 goods it imported from EAEU countries while being able to enjoy the same discounts for 502 goods it exported to the bloc.
Iran and the EAEU hope the FTA signed on Monday could enable them to increase their annual trade by nearly four times to some $20 billion within the next five to seven years.