In retaliation, the Armenian government announced on October 20, 2020, a decision for banning the imports of Turkish goods as of December 31, 2020.
Following the mentioned decision, Armenia has now reached out to the Islamic Republic to replace Turkish commodities with Iranian products in its markets. This has presented a new opportunity for Iranian producers to have a strong presence in this market and turn the (probably) temporary opportunity into a permanent trade bond between the two countries.
Although the border between Turkey and Armenia has been closed since 1993, the trade between the two countries has never ceased. The trade transactions between the two neighbors have been historically carried out through third countries like Georgia.
According to the Armenian Statistics Institute, Turkey’s annual exports to Armenia amounted to over $2 billion over the past 10 years. However, in reality, the total imports of Turkish goods by Armenian people considering the so-called ‘luggage trade’ is much more than the mentioned figure.
In fact, Turkey has been dominating the Armenian market for a very long time.
Despite having shared borders, and close cultural and historical relations, the trade between Iran and Armenia has not been at a favorable level over the past few decades.
However, Iran’s preferential trade agreement with the Eurasian Economic Union (EAEU) has changed the prospect of the country’s trade relations with Armenia, paving the way for a boost in the economic relations between the two sides.
Back in January 2020, the Head of Iran-Armenia Joint Chamber of Commerce and Industry Hervik Yarijanian said the preferential trade agreement between Iran and EAEU has had a significant impact on the country’s trade relations with Armenia.
According to the official, the volume of trade between the two countries has witnessed an outstanding rise since the agreement became effective in October 2019.
Iran mainly imports red meat from Armenia, while Armenia imports polymer raw materials, machinery, industrial gases, manufactured artifacts, leather and leather goods from Iran, he said.
The new opportunity
With the Turkish products being wiped out of the Armenian market, Iranian producers are presented with a great opportunity to showcase the high quality of their products and benefit from the huge capacities of the mentioned market.
Last week, the Director-General of the Asia-Pacific Department of Iran’s Trade Promotion Organization (TPO) said that Armenia is willing to replace Turkish commodities with Iranian products.
According to Mojtaba Mousavian, the Republic of Armenia plans to replace 2,250 Turkish commodity items with Iran-made products.
Later on Tuesday, a board member of the Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) told ILNA that Iran now has the advantage of exporting goods such as sweets and chocolates, ceramic tiles, detergents, shoes, flooring and carpets and textile and clothing to Armenia, in addition to the previously traded items.
“We may not have been able to make good use of regional agreements in the past, but this is an opportunity for us to enter the Armenian market with full force,” Ali Shariati said.
Establishing strong economic relations with other countries requires a united front by the government, which means it requires close coordination between various government bodies to set the scene for the private sector and traders to play their role.
In this particular case, the situation begs the immediate attention from a triangle consisting of the Trade Promotion Organization, the Iran-Armenia Joint Chamber of Commerce, and the Ministry of Foreign Affairs.
By mobilizing the facilities in the mentioned bodies, exporters will be able to fully showcase their capacities and capabilities and take advantage of this probably short-term opportunity.