Survey of Trade Potentials between Iran and Potential Candidate Countries in Region (Turkey, Syria, Kuwait, Oman, Bahrain, Qatar, Saudi Arabia, United Arab Emirates) The Gravity Model Approach

One of the country's foreign trade development strategies, is recognizing the economic potential of the major trade partners and ways of improving the volume and composition of foreign trade, both exports and imports, to its optimum level . Accordingly, in this study to estimate the potential for non-oil trade between Iran and selected countries over the period 1995-2009 the gravity model using panel data analysis as well as the most appropriate method for estimating is considered.
The results show that the coefficient multiplying GDP of trading partner countries and Iran is positive and therefore countries economic size has a direct effect on bilateral trade between them. Also in this study the Iran and turkey’s membership in ECO and the role of such a regional treaty in commercial relations between Iran and the selected countries to explore regional integration effect has been investigated.