Preferential trade regime between the EAEU Member States and Iran extended for 3 years

On October 15, 2022, the Eurasian Economic Union and its Member States exchanged notes with the Islamic Republic of Iran on the completion of domestic procedures necessary for the entry into force of the Protocol to the Interim Agreement of 17 May 2018, leading to formation of a free trade area between
the Eurasian Economic Union and its Member States, of the one part, and the Islamic Republic of Iran, of the other part (the Interim Agreement).

The Protocol extends the Interim Agreement for three years – until October 27, 2025. The Interim Agreement, besides reducing import customs duties, includes a number of other equally important trade aspects. This document is based on the norms of the General Agreement on Tariffs and Trade of the World Trade Organization (GATT WTO) and international law governing sanitary and phytosanitary measures, technical barriers, customs procedures and trade facilitation, dispute settlement, internal market protection measures and rules of origin.

Under the Interim Agreement Iran, not being a WTO member, adopted the norms fixed in the GATT WTO. According to the goods coverage of the agreement, Iran undertakes to refuse to apply unreasonable measures of tariff and non-tariff regulation, as well as other measures of indirect protection of domestic producers.

Therefore, the Interim Agreement preserves the current preferential trade regime with Iran, as well as significantly increases the predictability of trade regulation with Iran.

During the validity of the Interim Agreement, the volume of mutual trade
with Iran has grown significantly: in 2019-2021 the trade turnover between Kazakhstan and Iran increased by 16.6% - from 377.4 million dollars
to 440.1 million dollars.

By the end of 2021 the trade turnover between Kazakhstan and Iran amounted to 440.1 million dollars, which is 84.8% higher than in 2020 (238.1 million dollars). Exports from Kazakhstan to Iran in 2021 increased 2.1 times and amounted to 275.3 million dollars. Imports to Kazakhstan from Iran in 2021 increased by 50.4% and amounted to 164.9 million dollars.

In 2021 there is a sharp increase in exports of Kazakh wheat (an increase of 32.3 times or by 143 million dollars (from 4.6 to 147.6 million dollars), barley (an increase of 3.1% or by 3.6 million dollars (from 116.8 to 120.4 million dollars), rapeseed oil (by 2.2 million dollars (from 0 to 2.2 million dollars).

The Protocol will enter into force on October 25, 2022.