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Iran Proposes To Establish Barter Trade System With Kazakhstan

By Orkhan Jalilov May 21, 2020

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The picture shows the grain terminal “Ak Biday” located on the eastern shore of the Caspian Sea in the seaport of Aktau in Kazakhstan. / Portaktau.kz

Iranian President Hassan Rouhani has expressed his country’s readiness to establish a barter system with Kazakhstan in order to deepen bilateral trade relations.

In a phone conversation on May 20, President Rouhani told his Kazakh counterpart Kassym-Jomart Tokayev that it was important to develop rail and road transit and banking cooperation, as well as to finalize the agreement on facilitating the issuance of visas for citizens of the two countries.

‘‘A barter system can deepen trade relations between the two countries, and Iran is ready to establish this mechanism,’’ Rouhani said, according to the official website of the Iranian president. 

Iran’s top official also said that the bilateral economic relations between the two nations, as well as relations within the Eurasian Economic Union (EAEU) have been at a high level despite the crisis caused by the novel coronavirus pandemic. 

The trade agreement between Iran and the EAEU officially came into force in October 2019. Last August, Iran’s Ambassador to Russia Mehdi Sanaei attended a meeting with a senior EAEU official to finalize an agreement on the formation of a free trade zone between Iran and the regional union. Iran and the EAEU have traded a total of 5.1 million tons of goods worth $1.78 billion starting from October 27, 2019. A preferential trade agreement between the two sides came into effect on April 24, 2020.

Meanwhile, President Tokayev proposed on Wednesday to work out practical measures at the government level to boost bilateral economic ties.

The presidents also expressed satisfaction over cooperation in railway and road fields, noting the importance of more effective use of the potential of the Kazakhstan-Turkmenistan-Iran railway. They also underlined their readiness to increase trade using multimodal transport corridors across the Caspian Sea.

On Wednesday, the Kazakhstani parliament approved the bill on ratification of the agreement between Kazakhstan and Iran on mutual legal assistance in civil matters.

The purpose of the agreement is to strengthen bilateral cooperation on legal issues between the two countries, and to provide legal assistance in civil matters, creating an effective bilateral mechanism for protecting the rights and interests of individuals and legal entities of both states.

In 2018, the Iranian and Kazakh presidents weighed plans for trade exchanges between the two countries using their national currencies. In January-October 2019, trade between Kazakhstan and Iran amounted to $302.3 million. Compared to the same period in 2018, this figure decreased by 28.3 percent, from $421.8 million in January-October 2018. The volume of mutual trade amounted to over $516 million in 2018.

Iran mainly imports grain, oil products and metals from Kazakhstan, while the Central Asian state has special interest in Iranian investments in mechanical engineering, infrastructure, transport, telecommunications.

Iran has been partnering Kazakhstan within several oil and gas projects, including the construction of a pipeline connecting Kazakhstan, Turkmenistan, and Iran (Persian Gulf) which will give Nur-Sultan access to the Asian markets.

In October 2019, Iran, Kazakhstan, Uzbekistan, Turkmenistan, and Turkey signed a cooperation document on a railroad corridor that would connect China to Turkey and Europe. The transit of goods through the five participants in the project will be subject to the same and completely competitive tariff rates.