Iran takes another step toward formally joining the Eurasian Economic Union

Tabnak - Following the US withdrawal from the JCPOA in May 2018, Iran doubled down on its efforts to expand ties with non-Western countries in order to compensate for the economic benefits lost due to the new American sanctions. The move now appears to be bearing fruits, with Iran’s membership in the Eurasian Economic Union as its most recent evidence.

In this vein, a long-anticipated trade deal between Iran and the Eurasian Economic Union (EAEU) will officially take effect on October 27, according to reports and remarks by a senior Iranian minister of government.

Russian media reports on Wednesday said that Iran’s ambassador to the country Mehdi Sanaei had attended a meeting with a senior EAEU official to finalize an interim agreement that would lead to the formation of a free trade zone between Iran and the regional union.

A press release from the Eurasian Economic Commission (EEC) showed that Sanaei and EEC chief Tigran Sarkisyan had exchanged the documents needed to complete formalities for the deal to come into force in late October.

“The negotiations were challenging, but they are over. The agreement has been signed and ratified. The progress is evident,” said Sanaei.

Iran’s Minister of Energy Reza Ardakanian also appeared in a late-night TV interview on Wednesday saying that Iran' official accession to the EAEU will begin some 60 days after the exchange of documents in Moscow.

Ardakanian, who is also the chairman of Iran-Russia Joint Economic Commission, said Iran will officially join the EAEU in late October.

He went on to say that after Iran’s accession to the EAEU, 864 various products would be included in the preferential trade agreement (PTA) reached between the two sides. The energy minister added that the accession would allow exports on zero tariffs for 70 products while 503 other data-x-items would enjoy lowered duties.

Back in June, the Iranian parliament ratified an agreement that allows the administration to join a free trade zone with the Eurasian Economic Union (EAEU) countries.

The agreement, signed in Kazakhstan in May 2018, sets the main rules of trade between the EAEU, Iran and those of the World Trade Organization (WTO), of which Iran is not a member.

The free trade zone is planned to be in effect for four years, under which the EAEU will grant Iran tariff concessions on more than 500 items. Russia’s State Duma and the Federation Council had ratified the agreement to establish Iran-EAEU free trade zone in November 2018.

The Eurasian Economic Union includes Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. Iran and EAEU members started to develop the agreement on the free trade in 2015, though the signing was postponed several times.