Iran and EAEU Ink Landmark Free Trade Agreement

Iran and the Eurasian Economic Union (EAEU) have finally signed a long-awaited free trade agreement.

by Faruk Imamovic
Iran and EAEU Ink Landmark Free Trade Agreement
© X/MarioNawfal

Iran and the Eurasian Economic Union (EAEU) have finally signed a long-awaited free trade agreement. This major advancement was the highlight of the recent meeting in St. Petersburg of the Supreme Eurasian Economic Council. The negotiations, primarily led by Moscow and Tehran, have been ongoing and closely watched by international observers, as reported by Nezavisimaya Gazeta.

Maxim Chereshnev, a member of the Business Russia General Council and chairman of the board of the Council for the Development of Foreign Trade and International Economic Relations, expressed optimism about the deal's benefits, especially for Russia.

"The free trade agreement between the EAEU countries and Iran will greatly benefit Russia because Russian goods account for 70% of the EAEU’s trade with third countries on average," he said. Chereshnev noted the sizeable Iranian market and the relatively low competition faced by Russian companies there, setting the stage for a potentially lucrative economic relationship.

According to him, the Iranian market "is rather large, and, unlike in other markets, companies from other foreign countries are poorly represented, thus reducing the level of competition that Russian companies will face."

Economic Opportunities and Growth

Natalya Nikonorova, a member of the Russian Federation Council Committee on Foreign Affairs, spoke to Izvestia about Iran's diverse economic capabilities.

Despite being under sanctions for nearly 45 years, Iran boasts robust development in various sectors.

"Iran is one of the [world’s] biggest gas producers and leading oil producers. Its heavy industry is pretty well developed.

Iranian-made motor vehicles can also carve out a solid niche for themselves in the Russian market," she explained, highlighting potential areas for collaboration and joint ventures, particularly in medicine manufacturing.

The agreement is set to significantly boost economic interactions between the EAEU members—Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia—and Iran. Trade turnover is expected to triple, potentially reaching $18-20 billion, up from $6.2 billion in 2020.

The sectors likely to benefit include agriculture, metal products, oil and gas, timber, and machinery from the EAEU side, and textiles, fruits, and vegetables from Iran.