Moscow, 27 December 2023 (TDI): Russian-backed Eurasian Economic Union (EEU) members have signed a fully-fledged free trade agreement with Iran, according to a statement released by Russia’s economy ministry and the EEU on Monday.
With effect from 2019, the new long-term agreement will replace the previous one, facilitating trade with Iran. Trade grew from $2.4 billion in 2019 to $6.2 billion in 2022 under the prior agreement between the two countries.
Furthermore, sources in Moscow said in a report that the free trade agreement between Tehran and the EAEU had been signed during a Supreme Eurasian Economic Council meeting in the Russian city of Saint Petersburg.
The deal is the result of two years of intensive, professional negotiations between Iran and the EAEU, which is led by Russia. The Eurasian Economic Union-Iran Free Trade Agreement has also been signed by the deputy prime ministers of Kyrgyzstan, Belarus, Armenia, and Kazakhstan.
Moreover, both the region and Iran have taken on additional significance for the Kremlin after Western sanctions over Moscow’s conflict in Ukraine limited Russia’s foreign trade routes and forced it to look for markets outside Europe.
In addition to establishing a preferential regime for nearly all trade between Russia and Iran, the new agreement will eliminate customs taxes on about 90% of commodities.
Maxim Reshetnikov, the minister of economy of Russia, estimates that the agreement will help Russian companies save about 27 billion roubles ($294 million) a year.
Iran received an invitation to join the European Union five years prior, and the two sides concluded their cooperation with the signing of a three-year preferential trade agreement (PTA) in 2019.
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Under the terms of the PTA, Tehran was authorized to give tariff reductions on 380 commodities it imported from EAEU nations and get the same benefits for 502 goods it exported to the bloc.
With the signing of the Free commerce Agreement on Monday, Tehran and the EAEU hope to increase their yearly commerce by roughly four times, reaching $20 billion within the next five to seven years.