The Impact of Tariff Reduction by EU Countries on Iran's Pistachio Exports

Pistachio is among the main exportable agricultural goods in Iran. The main consumers of this product in the world are countries with high per capita income, like EU countries. On the other hand, there has been severe competition among the main exporters of pistachio, i.e. Iran, USA and Turkey.In this study we have investigated that the impact of tariff reduction from the EU countries on Iran's export of pistachio (Among 1994- 2005). We have considered these scenarios: The reduction of 20 percent, 40 percent and 100 percent of tariff.Our results show that the Iranian pistachio is considered as a luxury commodity- with respect to the income elasticity. While the U.S and Turkey are the main competitors of Iran in this market, based on the elasticity of substitution within the period of study, they have had a lesser competitive power than Iran in the EU countries. We have also found that even though the reduction of tariff in the EU countries will increase the export of Iranian pistachio, but the percentage of this increase was not significant.