Prices for Iranian fruits and vegetables in Russia may decrease by about 3-4%, and the share of products from this country may rise from 5 to 30%, experts interviewed by Izvestia believe. Such changes are possible due to an almost twofold decrease in customs payments between the Eurasian Economic Union (EAEU) and Iran, according to a review by the Ministry of Economic Development (Izvestia has it).
On average, tariffs for the business of the association will decrease by 23%, and for Tehran - by 64%. The states will mutually reduce a number of import duties after the agreement on the creation of a free trade zone (FTA) is working, the document comes into force this Sunday, October 27.
Fees down
Entrepreneurs from Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan will be able to export goods to Iran at discounted rates in the next three years. But they will significantly simplify the terms of trade for the Iranian side. This will become possible thanks to the agreement concluded in May last year on the temporary establishment of an FTA between the EAEU and Tehran.
On average, tariffs for Iran will decrease by 64%. Specifically for fruits - by 50–100%, for vegetables - by 25–50%, and for nuts, complete zeroing is planned. Most of all duties will be reduced on tomatoes, cucumbers, potatoes, parsley and dill, the Ministry of Economic Development emphasized. EEC Trade Minister Veronika Nikishina added that Iran will also receive preferences for the import of dried fruits, dishes and carpets to Russia.
For exporting entrepreneurs of the EAEU, Iranian duties will decrease by an average of 23%, the Ministry of Economy told Izvestia. According to Veronika Nikishina, the business of the Union countries will receive preferences in meat and fat and oil products, certain types of confectionery and chocolate, as well as in metals and cosmetics.
The FTA agreement with Iran will last three years - until October 2022. After that, a decision will be made to create a full-fledged free trade zone covering all types of goods. According to MGIMO professor Vladimir Salamatov, limiting the term of the agreement is a compromise and balanced decision. This period will allow the parties to understand the possibilities and prospects of cooperation in a full format, taking into account the geopolitical characteristics of Iran and the fact that it is not a WTO member.
REFERENCE "Izvestia"
By the end of 2018, Russian-Iranian trade turnover increased by 2017% compared to 1,98 and amounted to $ 1,7 billion. As a result, Moscow took 12th place in the list of Tehran’s main partners. Until now, the basis for trade relations between the countries was the 1947 Agreement between the USSR and Iran. The agreement on the FTA agreement covers 97% of the current Russian export of agricultural products and 33% of the supply of industrial products.
The consumer will feel on himself
The impact of the agreement on the Russian economy is premature to assess, according to the Ministry of Economy. In addition, at first, the existing rules of bilateral relations will be more influenced by trade, and business will need time to adapt to innovations.
Experts interviewed by Izvestia assessed the agreement with Iran positively. According to Alisen Alisenov, associate professor at RANEPA, all five countries of the union will benefit. But most of all - Russia and Armenia, because they have well-established supply channels. According to the expert, in the long term, the trade turnover between Russia and Iran can grow by $ 1,5 billion. Iranian companies are also provided with beneficial benefits, taking into account external pressure on the country, as well as access to the 183 millionth market of the Eurasian Union, Alisen Alisenov said.
Business only welcomes the introduction of preferential terms, given that Iran is a large and rich country, said the president of Opora Rossii, Alexander Kalinin. However, he stressed that it is necessary to solve the problem with mutual payments, because Iran is disconnected from the American system for transmitting financial messages SWIFT and this can create difficulties in mutual settlements.
Earlier, the media, citing Iranian President Hassan Rouhani, reported that alternative payment mechanisms would be used with Russia and the EAEU countries. He noted that with a number of states, including the Russian Federation, Tehran has already switched to payments in national currencies when conducting trade operations.
Prices for Iranian fruits and vegetables in the Russian market may fall by about 3-4%, said Vladimir Salamatov from MGIMO. When the harvest season ends in Eurasian countries, Iranian products will be imported, he added. Now their share on the shelves of Russian stores is small, but gradually it can grow due to the mutual reduction of duties. It is possible that dumping by Tehran will force retailers to reduce prices for other imported products.
Today, fruits and vegetables from Iran occupy a small share of the market, about 5%. With a decrease in import duties, it can grow to 30%, believes Alisen Alisenov from RANEPA.
The Ministry of Economic Development also hopes that the average buyer will benefit from the free trade agreement. However, they recognized that price reductions are not possible for all types of goods. For example, medicines, most likely, will not fall in price, because these products have special rules for access to the market and their own separate marketing policies.