Monday, September 26, 2022

Iran, Azerbaijan Need to Sign Free Trade Agreement

Economic estimates indicate that Iran needs to sign a free trade agreement with Azerbaijan Republic if it wants to gain an appropriate share in the Azeri market.

Deputy Manager for Economic Evaluation of Tehran Chamber of Commerce, Maryam Khazaee, says by signing a free trade agreement with Azerbaijan, Iran can have an appropriate share in Azerbaijan’s market.

According to a Farsi Report by the Azad News Agency (ANA), she made the statements during a meeting on the capacities for Iran’s exports to Azerbaijan. The meeting was attended by representatives from private sectors as well as the Trade Promotion Organization, Export Development Bank and Iran-Azerbaijan Chamber of Commerce.

During the meeting, Khazaee read out a brief report on the economic indexes of Azerbaijan. “The latest table of the World Bank ranks Azerbaijan among countries with an average upward income. Meanwhile, Azerbaijan is categorized as a state with a relatively high annual income. The average foreign investment in Azerbaijan has been $4.3m per year from 2012 to 2015; however, the number rose to $4.5m in 2016,” she noted.

Khazaee went on saying that Azerbaijan plans to turn into a developed country by 2020 with a high level of income. She said Iran has not yet managed to play a key role in the Azeri market. “One of the main measures which can contribute to Iran’s growing role in the region is signing a free trade agreement with the neighbouring state,” she added.


Insurance Coverage and Exporters’ Financial Provision

Ashkan Abbasi Tehrani, the head of the State Risk and International Cooperation Group at the Export Guarantee Fund of Iran briefed the participants on the official approach of the Fund towards the exporters. He said the fund issues insurances for all exporters. “Simply, we insure the buyers’ risk,” he noted.

Touching on other services to be offered by the fund, he said the fund is committed to financially support the exporters. “The Fund issues insurances at the request of the exporters. It can also guarantee their credits in the banks. So, the exporters along with the foreign banks, companies and governments can rely on the Fund’s letter of guarantee to press ahead with their project,” Abbasi added.

He said the Fund offers various other services and added the details of the services are available on the portal of the Fund.

He referred to the services offered by the Fund to facilitate exports to Azerbaijan, adding that the Republic is one of the main CIS states which has the largest insurance coverage. “We have allocated $21m to short-term and $120m to long-term insurance coverage in the Azerbaijan Republic.”

He also noted that the insurance covers software, plastic goods, industrial machines, food and clothes.

Azerbaijan Republic is categorized by the Export Guarantee Fund of Iran as one of the five high-risk countries in terms of export of goods. The short-term and long-term coverage of the export to the country stands respectively at $90m and $180m.

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