Impact of The Interim Agreement Between Iran and The Eurasian Economic Union in The Development of Trade Between These Countries

The spread of the phenomenon of globalization of the economy led to the relations and cooperation of countries in order to study the interests in the form of Regional cooperation should be on the agenda of many developing countries, especially Iran. Under such circumstances, it has encouraged Iran to create the necessary conditions for trade with tariffs and economic convergence.In this research, an attempt has been made to study trade (export and import) of Iran and five member countries of the Eurasian Economic Union with each other, compared to other countries and using an applied model called the Smart model, the effects of trade creation and trade diversion resulting from the interim agreement between Iran and the Eurasian Economic Union and Review and analyze member countries using period data 2016 to 2020. In this regard, the main question of this research is what has been the impact of the agreement on trade and the fulfillment of the commodity obligations of the parties since its implementation. So, the hypothesis has been tested that the development of Iran's trade with Eurasian Economic Union countries will lead to a reduction in Western sanctions pressure, providing the necessary grounds for Iran’s economic development and foreign trade and benefiting from the economic capacities of the Union.

In this paper, using a partial equilibrium model called Smart Simulation Model, the effects of tariff reduction on Iran's trade flow in agricultural trade with Eurasian Economic Union countries in the form of concepts of trade creation and trade deviation have been investigated. In the next step, the effects of tariffs on agricultural commodity groups at the classification level of coordinated system (HS) have been analyzed.The statistical population of this study includes Eurasian Economic Union and Iran. The total value of bilateral trade (exports and imports) between Iran and the Eurasian Economic Union Between 2016 to 2020 is derived from the Customs of the Islamic Republic of Iran and from 2016 to 2019, Trade map site using Excel software. Iran's tariff statistics are taken from the Export and Import Regulations Book (2016-2020).

Results of Research on this agreement shows, relatively, trade between Iran and the five countries of Eurasian Economic Union has improved in the year since its implementation, compared to the average of the past three years. The results of the Smart model show a 4.4% increase in imports from the agricultural sector from the union due to tariff reductions, part of which is due to trade creation and part due to trade diversion.