MOSCOW (Dispatches) -- A free trade zone agreement between Iran, Russia and several countries that cover the vast Eurasian region spreading from the borders of Eastern Europe to Western China is possible by the end of the year, Russia’s TASS news agency reported on Monday.
Russian Deputy Prime Minister Alexei Overchuk told the state TASS agency in an interview that talks between the Eurasian Economic Union - which comprises 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.”
Both the region and Iran have taken on additional significance for the Kremlin after Western sanctions limited Russia’s foreign trade routes and forced it to look for markets outside Europe.
Russian-Iranian commodity turnover rose 20% in 2022, according to government data.
The regional agreement with Iran would replace and expand an interim pact that already provides a reduction in customs duties on hundreds of categories of goods.
In November 2022, Russia started swapping oil products with Iran and in March, Tehran said it counts on “huge volumes” of both oil and gas swaps with Moscow.
Overchuk also told TASS, without providing much detail, that negotiations among the Eurasian Economic Union countries on creating a common gas market continue.
An evolution in Iran’s foreign relations under the current administration has occurred with Russia.
President Ebrahim Rais’s visit to Moscow in January 2022 resulted in a leap in trade between the two countries and ushered in bilateral cooperation in infrastructure, energy. Last month, the two countries signed of a deal to finance and build an Iranian railway line as part of the international North–South Transport Corridor.
With both countries under Western sanctions, Iran and Russia are working on establishing new
routes for financial exchanges, with barter deals, the use of national currencies in trade and launch of an alternative system to SWIFT international messaging platform being some of the alternatives.
The Iranian government is also trying to expand Iran’s political and economic relations by joining international organizations, including the Shanghai Cooperation Organization which approved the country’s permanent membership in September 2021.
Last year, it applied to join the BRICS group of Brazil, Russia, India, China and South Africa that is being cast as a powerful emerging market alternative to the West. Officials say Iranian membership in BRICS would result in added values for both sides and diversify access to international economic, monetary and financial facilities.