Armenian and Iranian officers have lengthy set a $1 billion commerce goal as the specified normal for commerce between Armenia and Iran, and have lately mentioned a $3 billion objective. Observing the developments in commerce between Armenia and Iran, it turns into clear that it’s unlikely to exceed the $ 3 billion threshold within the close to future. Additionally, whereas we’re slowly approaching our $1 billion objective, we’re not there but. But we’re getting nearer.
In 2021, commerce between Armenia and Iran exceeded $500 million for the primary time, and in 2022 it exceeded $700 million. According to out there knowledge, bilateral commerce in 2023 amounted to $690 million, a slight lower in comparison with the earlier yr. Overall, commerce between Armenia and Iran has been trending positively in recent times.
While that is definitely a commendable achievement, a better have a look at the character of Armenia-Iranian commerce reveals some worrying developments. In specific, the commerce steadiness is very skewed. Imports from Iran far exceed exports. According to 2023 knowledge, roughly 84 p.c of Armenia’s commerce with Iran consisted of imports from Iran.
Looking on the knowledge over the previous decade, particularly from 2013 to 2023, we see that each imports from Iran and exports to Iran have fluctuated, generally rising and generally reducing, whereas imports from Iran to Armenia It will be seen that the general development of exports to is altering. It turned upward. In distinction, Armenia’s exports to Iran have remained comparatively secure all through this era.
I imagine that commerce gross sales may change into extra secure and develop quicker if the commerce imbalance problem is resolved to some extent. Resolving this imbalance can even contribute to extra secure and long-term financial cooperation. While this imbalance is a pure results of the financial constructions of each Armenia and Iran, it’s encouraging that this downside can also be being acknowledged in Iran. Therefore, each nations must put extra effort into resolving this problem.
Another problem that impacts our commerce is the composition of Armenia’s exports to Iran. More than 50 p.c of those exports are electrical energy. For instance, in 2013 and 2014, the share of electrical energy in whole exports reached 90% in some years. The state of affairs has improved considerably lately. In 2023, the electrical energy share was 62%. Additionally, the vary of merchandise exported to Iran has expanded.
Despite this constructive change, electrical energy nonetheless dominates Armenia’s exports to Iran. This exhibits that whereas exports are rising, there’s nonetheless an pressing must diversify the vary of export merchandise.
For comparability, the principle export from Iran is gasoline, however the merchandise imported from Iran are far more various, and the share of gasoline in these imports is lower than the share of electrical energy in Armenia’s exports to Iran. will not be as vital as the proportion of There had been notable adjustments on this respect as nicely. In 2023, gasoline accounted for less than 10% of Iran’s whole exports to Armenia, in comparison with 33% in 2013. This decline was primarily attributable to development in different product classes. Furthermore, in 2023, Iran’s predominant exports to Armenia had been iron and non-alloyed metal. Other main exports included petroleum merchandise, development supplies, fruit and veggies, metals, pipes, and detergents.
Looking on the predominant merchandise exported from Armenia to Iran, they’ve modified over time, however the principle classes are:
Copper
Tobacco
Sheep and mutton
Chocolate
Steel
Engine
Motorcycle
In 2020, because of the coronavirus pandemic, ethyl alcohol additionally turned one of many predominant export gadgets.
Another vital issue that I wish to tackle is the affect of the Interim Free Trade Agreement signed between the EAEU (Eurasian Economic Union) and Iran on Armenia-Iranian commerce. Under this settlement, 360 gadgets had been included within the record of preferential tariffs and reductions for exports from the EAEU to Iran, and 502 gadgets for imports from Iran to the EAEU.
To put this into perspective, in 2016, three years earlier than the settlement got here into drive, bilateral commerce between Armenia and Iran amounted to roughly $230 million, with roughly 70% of that coming from Iran. It was imported to Armenia. Only 12.3% of those imports had been from product classes that had been later added to the preferential record.
In 2022, commerce between the 2 nations elevated to roughly $710 million, of which 84% was imported to Armenia. However, the proportion of privileged merchandise amongst these imported items has doubled, reaching 25.3%. This signifies that items eligible for preferential tariffs have change into cheaper for Armenian closing shoppers.
In different phrases, exports of products that profit from preferential tariffs have decreased considerably and have reached negligible ranges. This means that Armenian firms are usually not in a position to take advantage of the chance to export low cost merchandise to Iran’s giant marketplace for numerous causes. This is in sharp distinction to the state of affairs in different EAEU member states equivalent to Russia and Kazakhstan, the place greater than half of their exports are in product classes that profit from preferential tariffs.
Taking all this into consideration, such occasions spotlight the prospects and challenges for the event of bilateral relations, together with commerce and financial relations, and supply a wonderful platform to assist efforts to beat these obstacles by joint motion. Then I imagine.
Finally, I wish to categorical my gratitude to my Armenian and Iranian colleagues who accepted our heart’s invitation and enriched this workshop with their beneficial insights. We hope that, due to the efforts of all of us, the considerations and solutions raised right here will result in sensible options. thanks.
Zhanna Vardanyan, Ober Center for Analysis.