Page 24 - IRANRptDec19

Iran’s PTA with EEU member countries commences
Iran, Azerbaijan sign MoUs for border JVs that may include ‘technology
directed by the US at Tehran.
At the end of the meeting, 15 articles of increased cooperation and other matters not disclosed were signed by the representatives of Iran and Tajikistan.
October 27 saw the commencement of a temporary preferential trade agreement (PTA) between the Moscow-led Eurasian Economic Union (EEU) and Iran, with more than 862 items seeing a significant tariff change, with many tariffs reduced to zero.
The agreement ​between Iran and the EEU​—​which groups Russia, Kazakhstan, Armenia, Belarus and Kyrgyzstan—initiates a PTA that is the first such economic agreement signed by the Islamic Republic since it was founded in 1979. Items covered by the deal include everything from fish to seeds to metals and even food items like waffles.
However, despite the large fanfare protectionism is alive and well on both sides. Iran throttles imports of rice from EEU states during the summer months, for instance. The country is hugely protectionist towards its northern rice production. Any hint of competition to the limited production of rice in Iran would be seen as negative for the Rouhani administration.
Iran specifically bans the import of “semi-milled or wholly milled rice, whether or not polished or grazed” from July 23 to October 23 annually. However, during periods when it is not banned, there will be a PTA reduction of 42% on imports from the EEU to Iran. It remains to be seen how this limited import agreement will work in practice.
The PTA will also apply to buckwheat consignments sent to Iran, with the tariff falling from 40% to 6% and “crude oil, whether or not degummed”, with a decrease to 10% from 40%. Imported chewing gum, meanwhile, gets a cut that takes the tariff from 82% to 10%. For waffles and wafers the reduction is from 63.6% to 20%. Pasta items under “other pasta” are pegged to a 20% tariff.
Cosmetics also play a part in the broader change in tariffs including shampoos, The tariff on shaving kits imported into Iran falls 30% to 18.2% while for EEU-sourced brassiéres there is a 30% reduction to 38.5%.
There is, meanwhile, a substantial reduction on rails—though exactly how much that is has not been made clear—that will something Russian Railways export to Iran ​under a signed agreement​ ​inked earlier this year to create a joint venture to begin trade.
Looking at items flowing from Iran to the EEU, arts and crafts and Persian rugs now enjoy zero tariffs. Included decorative items such as chrysanthemums, lilies and other ornamental flowers see a halving of tariffs.
Also zeroed are tariffs on Iranian fruit and vegetables including oranges, citrus limon, salad vegetables, cauliflowers and broccoli, celery other than celeriac and cabbage lettuce.
It was reported recently that​ ​Uzbekistan is interested​ in joining the EEU.
Iran and Azerbaijan have signed memoranda of understanding (MOUs) aimed at developing at least six joint ventures by their border, Mehr News Agency reported. ​Around 20mn ethnic Azeris live in Iran. The majority live close to the border that divides the Republic of Azerbaijan in the west and the
24​ IRAN Country Report​ December 2019 www.intellinews.com