Impact of The Interim Agreement Between Iran and The Eurasian Economic Union in The Development of Trade Between These Countries

Document Type : Research Paper

Authors

1 Associate Professor and Faculty Member of Agricultural Planning, Economics and Rural Development Research Institute

2 Master of Planning and Economic Deputy of the Ministry of Jihad Agriculture

3 Master of economics, Business Development Deputy of the Ministry of Jihad Agriculture

Abstract

Extended Abstract
Introduction
The spread of the phenomenon of globalization of the economy led to the relations and cooperation of countries in order to study the interests in the form of Regional cooperation should be on the agenda of many developing countries, especially Iran. Under such circumstances, it has encouraged Iran to create the necessary conditions for trade with tariffs and economic convergence.In this research, an attempt has been made to study trade (export and import) of Iran and five member countries of the Eurasian Economic Union with each other, compared to other countries and using an applied model called the Smart model, the effects of trade creation and trade diversion resulting from the interim agreement between Iran and the Eurasian Economic Union and Review and analyze member countries using period data 2016 to 2020. In this regard, the main question of this research is what has been the impact of the agreement on trade and the fulfillment of the commodity obligations of the parties since its implementation. So, the hypothesis has been tested that the development of Iran's trade with Eurasian Economic Union countries will lead to a reduction in Western sanctions pressure, providing the necessary grounds for Iran’s economic development and foreign trade and benefiting from the economic capacities of the Union.
Materials and Methods
In this paper, using a partial equilibrium model called Smart Simulation Model, the effects of tariff reduction on Iran's trade flow in agricultural trade with Eurasian Economic Union countries in the form of concepts of trade creation and trade deviation have been investigated. In the next step, the effects of tariffs on agricultural commodity groups at the classification level of coordinated system (HS) have been analyzed.
The statistical population of this study includes Eurasian Economic Union and Iran. The total value of bilateral trade (exports and imports) between Iran and the Eurasian Economic Union Between 2016 to 2020 is derived from the Customs of the Islamic Republic of Iran and from 2016 to 2019, Trade map site using Excel software. Iran's tariff statistics are taken from the Export and Import Regulations Book (2016-2020).
Conclusion and Discussion
Results of Research on this agreement shows, relatively, trade between Iran and the five countries of Eurasian Economic Union has improved in the year since its implementation, compared to the average of the past three years. The results of the Smart model show a 4.4% increase in imports from the agricultural sector from the union due to tariff reductions, part of which is due to trade creation and part due to trade diversion.
Suggestions
According to the obtained results, it is recommended that:
- Considering the good experiences of this agreement, it is suggested that sufficient awareness of the capacities of this agreement be given to all traders of the country.
- This study shows that among Eurasian countries, trade has generally benefited Russia. Therefore, it is necessary to continuously evaluate the trade process between the parties at the same time as the agreement is implemented so that by analyzing the conditions and identifying the possible damages, appropriate policy measures should be taken in order to increase the national interest.
- The diversity of Iranian export goods to the Eurasian Economic Union is much less than imported goods. Therefore, it is necessary to create diversification in the country's export goods, especially edible fruits, dried fruits and spices, which have the most effects of trade and trade deviation in the Union for the benefit of Iran.
- Statistical analysis of this study indicates that one of the topics emphasized for improving trade balance is enabling the export capacities and potentials of products imported from other countries of the world under the current conditions of the Eurasian Economic Union.

Keywords

References

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