Evaluation & Estimation of Bilateral Trade Potential between lran & Azerbaijan Republic

This article is intended to assess the Capacity and Trade Potential between Iran and Azerbaijan Republic by using 4 indices of Drysdale, Cosine, Trade Potential and Revealed Comparative Advantage (RCA) for the period of 2003-2007. The estimation of Iran’s export potential for exporting to Azerbaijan Republic during the period of 2003-2007 shows that Iran’s export potential maximum to Azerbaijan Republic annual amount of $886 millions. The most part of the Iran’s used export potential to Azerbaijan Republic (only 19.7%). According to Drysdale Index calculation, between lran and Azerbaijan Republic for the period of 2003-2007 had the lowest degree of trade complementarity. This index had been faced with some fluctuations during the period. Cosines Index for Iran’s export and Azerbaijan Republic’s import also indicates that this country the potential for trade cooperation with Iran has the least one. Cosines Index for Iran’s import and EU’s export also shows that trade cooperation with Iran and Azerbaijan has the lowest one. The findings show that Azerbaijan Republic and Iran have totally about 789 items of goods for export according to the “RCA” index. Among the 789 “RCA” items, 653 items (83%) belong to Iran and only 136 items (17%) belong to Azerbaijan.