During the Summit of the Supreme Eurasian Economic Council, Iran was awarded observer status in the EEU on December 26, 2023. This reflects a significant step in enhancing trade relations and cooperation between Iran and EEU member states, with a promise to eliminate tariffs on 87% of goods instigating substantial growth projections for mutual trade.
On December 26, 2023, during the Supreme Eurasian Economic Council meeting in St. Petersburg, Iran was officially granted observer status in the Eurasian Economic Union (EEU), as reported by Mehr News. This designation is anticipated to foster stronger economic ties between Iran and the EEU member states, which include Russia, Kazakhstan, Belarus, Armenia, and Kyrgyzstan. The Iran-EEU Free Trade Agreement promises to abolish tariffs on 87% of traded goods, while both parties will create a negative list of sensitive items exempt from tariff removal.
The trade agreement is expected to significantly enhance the overall economic interaction between Iran and the EEU, building upon the success of a temporary trade agreement that led to a notable increase in trade turnover from $2.7 billion in 2018 to $5.2 billion in 2023. In addition, mutual trade has observed a 12.8% growth year-on-year, reflective of the growing economic partnership.
Maxim Reshetnikov, Russia’s Minister of Economic Development, confirmed the granting of observer status during the session, remarking, “During the meeting, the heads of the union countries decided to grant Iran the status of an observer state of the EEU to strengthen ties with the promising Iranian market.”
This strategic move also aligns with the EEU’s goal of promoting economic collaboration with observer countries, thus raising the total number of observer states to three, alongside Uzbekistan and Cuba. Bakytzhan Sagintayev, Chairman of the Eurasian Economic Commission’s board, expressed optimism about the potential impacts of the agreement, emphasizing the expected acceleration of economic cooperation and improved business conditions.
Iran’s observer status will pave the way for a deeper economic relationship, particularly as Iran aims to enhance its trade engagements with both Russia and China. Additionally, a comprehensive cooperation agreement with Russia is anticipated to be signed soon. Overall, this development signifies a crucial step in enhancing the economic landscape in the region, while also providing Iran with new avenues for trade and investment opportunities.
The EEU was formed to facilitate economic integration among its member states, which are primarily located in Eastern Europe and Central Asia. The organization aims to create a common market and enhance cooperation in various sectors, including trade, industry, and agriculture. Iran’s recent ascension to observer status illustrates its bid to strengthen economic ties with regional powers. This status allows Iran to participate in discussions and benefit from trade agreements without being a full member, which presents a strategic opportunity given the current geopolitical tensions and sanctions faced by Iran.
The acquisition of observer status by Iran in the EEU marks a significant advancement in its economic relations with the bloc, poised to open new markets and lessen trade barriers. The anticipated implementation of the Free Trade Agreement is expected to yield considerable mutual benefits and further stimulate trade growth. This diplomatic progress aligns with Iran’s objectives of diversifying its economic partnerships and mitigating the impact of international sanctions, particularly from Western nations.
Original Source: www.intellinews.com
