Putin ratifies free trade agreement between EAEU, Iran

The cradle, June 13, 2024 — 

Tehran and Moscow have significantly increased ties over the past several years in a joint bid to overcome unilateral western sanctions.

Russian President Vladimir Putin signed off on a law ratifying the free trade agreement (FTA) between the Eurasian Economic Union (EAEU) and Iran on 12 June.

The agreement seeks to reduce or eliminate tariff and non-tariff barriers in trade to foster economic cooperation between the five-member EAEU and the Islamic Republic.

Established nearly 30 years ago, the EAEU is an Eurasian economic union of Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan. The bloc has a nominal gross domestic product (GDP) of $2.6 trillion.

Putin’s approval of the FTA with Iran came a few days after a delegation of Russian business representatives visited Iran’s Chamber of Commerce, Industries, Mines, and Agriculture (ICCIMA) in the capital, Tehran.

During the summit, ICCIMA Director Niloufar Assadi told the Russian delegation that customs, transportation, and money transfer issues are “obstacles” hindering trade between the two allied nations. Nevertheless, the Iranian official said a target of $40 billion in bilateral trade is still possible.

The FTA between Iran and the EAEU was signed in St Petersburg on 25 December, replacing a previous temporary pact signed in 2019.

At the time of its signing, officials revealed that the FTA would eliminate customs duties on almost 90 percent of goods while establishing a preferential regime for nearly all trade between Russia and Iran.

Under the government of the late Iranian president Ebrahim Raisi, Tehran and Moscow significantly boosted trade and defense ties. The two nations, alongside China, have also increased cooperation to negate the effect of unilateral western sanctions.

The growing ties between the allied nations also saw Iran join the Shanghai Cooperation Organization (SCO) and the BRICS bloc of emerging economies.