Measuring Iran's Trade Governance and Trade Facilitation with Central Eurasian Countries

Introduction: Iran is one of the countries that, in addition to enjoying a geopolitical position on transit routes, also has numerous neighbors, but international sanctions and dependence on crude oil exports have created difficulties for Iranian trade; for this reason, in addition to trying to reduce dependence on crude oil exports, expanding regional trade is also one of Iran's goals and efforts have been made to reduce the impact of these restrictions through regional trade governance.
Accordingly, the Eurasian region seems to be a suitable environment for achieving Iran's goals for two reasons: on the one hand, most of its countries are energy exporters, and crude oil exports cannot practically have a significant contribution to Iran's exports, and on the other hand, the current sanctions situation for Russia has provided a suitable environment for barter or dollar-free transactions. For this reason, this study aims to examine the level of Iran's trade with Eurasian countries and the feasibility of assessing the impact of trade governance on it.
Research question: What are the characteristics of Iran's trade with Eurasia, and how can trade governance tools facilitate the implementation of trade agreements?
Research hypothesis: Membership as a measure based on trade governance has improved Iran's trade exchanges.
Methodology and theoretical framework: The time series technique has been used to assess the feasibility of facilitating regional trade between Iran and Eurasian countries. A time series consists of a series of data that records the progress of an issue and allows it to be examined over a period of time. In other words, a time series is a set of observations that are arranged in time and are obtained from observing the phenomenon over a specific period of time.
Regional trade governance proposes two types of agreements: regional trade agreements and preferential trade agreements, both of which seek to facilitate regional trade. Regional trade facilitation through trade governance is a broad and multifaceted initiative. Trade governance through regional trade facilitation proposes a highly flexible and demand-driven approach that enables the target region to increase trade opportunities between countries by identifying the productive capabilities of a region.
Results and discussion: In examining the time series of Iranian exports to Eurasian countries, several points can be noted:
- Apart from Tajikistan and Turkmenistan, where the best export situation of Iran is in the middle of the time series, in other countries, Iran's exports are in the best situation at the end of the time series, which indicates an improvement in exports during the period under review.
- The growth coefficient has also proven that, by comparing the beginning and end of the period under review, the increase in Iranian exports to target countries in Eurasia, in addition to being present in all countries, is very significant in some cases: exports to Georgia increased by more than 25 times, to Russia by more than 10 times, to Armenia and Kazakhstan by more than 5 times, to Tajikistan, Turkmenistan and Uzbekistan by about 4 times, to Azerbaijan by about 2 times and to Kyrgyzstan recorded a 100% increase, indicating the existence of a continuous market for Iranian exports in the countries under study.
Also, the trend of Iran's imports from target countries in Eurasia shows that:
- Unlike the export trend, where more countries were in the best position at the end of the time series, only imports from three countries (Armenia, Kyrgyzstan, and Tajikistan) were in a better position at the end of the time series, which confirms the cyclical situation in Iran's import trend.
- Contrary to the export trend, which was positive in all countries, the growth coefficient has negative situations, confirming that in some countries the value of imports has even decreased compared to the beginning of the time series; this situation has been recorded in the three countries of Azerbaijan, Kazakhstan, and Turkmenistan.
Conclusion: Sanctions, dependence on oil and a dollar-based economy are reducing Iran’s economic resilience. Strengthening resilience requires focusing on production and export capabilities, diversifying trade to reduce political risk and using a regional approach to create synergies. The removal of regional infrastructure and regulatory bottlenecks has been effective at the global level. Given the trends, regional trade agreements with Eurasia (expanding from the current four countries to all Eurasian states) are strategically crucial. Empirical evidence shows that under sanctions, banking restrictions, and trade barriers, Iran’s exports to the region have increased, and imports have replaced part of Iran’s grain supply markets. Such agreements (bilateral or collective) would help Iran escape global isolation by gaining access to a regional market.