Page 25 - IRANRptMay21

Iran, Turkey in talks to revise PTA
Iran hopes for new five-year deal with Russia
end of this year, but Iran is seen as angling for full membership of the bloc as the next stage of mutual trade development. There is speculation that Speaker of the Iranian parliament Mohammad Baqer Qalibaf on a recent trip to Moscow passed a message to Russian President Vladimir Putin expressing interest in such membership.
Mir Hadi Seyedi at the TDO said trade with the EEU could vastly expand in line with further reductions in tariffs. Following Qalibaf’s visit to Russia, the two sides kicked off talks on possible free trade with zeroed tariffs, he was quoted as saying.
The EEU also has preferential trade agreements with Vietnam, Singapore and Serbia.
Iran and Turkey are negotiating to revise their six-year-old preferential trade agreement (PTA) with the aim of reducing tariffs to bolster trade, according to the Iran Chamber of Commerce, Industries and Mines. Officials in both countries have in recent years talked about achieving $30bn in bilateral annual trade. However, trade between the neighbours is still nowhere near that figure. Admittedly, last year was hit hard by the coronavirus pandemic, but 2020 saw trade between Iran and Turkey only reach $3.43bn, according to the Turkish Statistical Institute (TUIK, or TurkStat). That marked a sharp contraction of 45.8% y/y. Iran’s exports to Turkey reached $1.19bn, marking a 66.9% y/y decline, while Turkey’s exports to Iran were valued at $2.25bn, down 17.97% y/y.
Turkey’s main exports to Iran include cotton and other materials as well as industrial parts. Iran has a deal to export gas to Turkey.
The Iranian chamber said that if the Islamic Republic could reach a deal with the US that would lead to the dropping of Washington’s stringent sanctions on Tehran, it would no doubt trigger for Iran a big expansion of bilateral trade flows to and from Turkey.
Iran expects to extend the Treaty on the Foundations of Relations and Principles of Cooperation with Russia or to sign a new similar agreement following negotiations with the Russian Federation, IRNA reported citing the spokesperson of the Iranian Foreign Ministry, Said Khatibzadeh, on March 1.
The “similar agreement” is potentially Iran’s full accession into the Eurasian Economic Union (EEU) communicated by Iranian Parliament Speaker Mohammad Baqer Ghalibaf earlier in February on his highly publicised meeting with the head of the state Duma. In a letter, Ayatollah Ali Khamenei, the head cleric of Iran, said Iran is now willing to move beyond the current temporary preferential trade agreement (PTA) with Russia into a full economic union with the former Soviet Union states.
The original treaty was signed in March 2001, and its validity period was automatically renewed every five years.
Visiting Moscow on September 24, Iranian Foreign Minister Mohammad Javad Zarif said that before the next extension, Tehran is going to consider the possibility of updating the document taking into account current realities.
In July, Russian Foreign Minister Sergei Lavrov, following talks with Zarif, stressed that the last 20 years have been marked by significant changes in the international political and economic arena, as well as in terms of threats to the security of mankind.
According to the Russian foreign minister, it had become necessary to give the document a more modern look, which Lavrov and Zarif agreed to report to the presidents of Russia and Iran, hinting at a wholesale change in top-level relations.
25 IRAN Country Report May 2021 www.intellinews.com