Russia says regional free trade pact with Iran possible by year’s end

(Reuters) – A free trade area deal between Iran, Russia and several countries spanning the vast Eurasian region stretching from the borders of eastern Europe to western China is possible. end of the year, Russian news agency TASS reported on Monday.

Russian Deputy Prime Minister Alexei Overchuk told state agency TASS in an interview that the talks between the Eurasian Economic Union – which includes Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia – and Iran are in their final stages.

“We are moving forward,” Overchuk said. “We very much hope that such an agreement can be signed by the end of the year.”

The region and Iran took on added importance for the Kremlin after Western sanctions against Moscow’s invasion of Ukraine limited Russia’s foreign trade routes and forced it to seek markets outside the Europe.

However, despite closer ties between Moscow and Tehran since Russia invaded Ukraine in February 2022 and began buying large Iranian-made drones to attack the country, trade between the two markets has only increased. moderately.

Russian-Iranian commodity turnover grew 20% in 2022, government data shows, two-thirds of the overall growth rate Moscow has seen with China, another key partner with which Russia has expanded its political and economic alliance over the past two years.

The regional deal with Iran would replace and expand an interim pact that already provides for tariff reductions on hundreds of categories of goods.

In November 2022, Russia began trading petroleum products with Iran and in March Tehran said it was counting on “huge volumes” of oil and gas trade with Moscow.

Overchuk also told TASS, without providing many details, that negotiations between the countries of the Eurasian Economic Union on the creation of a common gas market were continuing.

(Reporting by Lidia Kelly in Melbourne; Editing by Michael Perry)

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