Examining the Effects of the Elimination of Trade Tariffs between Iran and the Eurasian Economic Union in Different Economic Sectors

Document Type : Research Paper

Authors

1 PhD student in Economics, Faculty of Management and Economics, Shahid Bahoner University of Kerman, Kerman, Iran (corresponding author);

2 Associate Professor, Department of Economics, Faculty of Management and Economics, Shahid Bahonar University of Kerman, Kerman, Iran;

3 Assistant Professor, Department of Economics, Faculty of Management and Economics, Shahid Bahonar University of Kerman, Kerman, Iran;

4 Professor of the Department of Economics, Faculty of Management and Economics, Shahid Bahonar University of Kerman, Kerman, Iran;

Abstract

Economic convergence with the Eurasian Economic Union can be further directed toward national interests with an exact understanding of the union. In this regard, in this study, the effects of eliminating trade tariffs between Iran and the Eurasian Economic Union were examined on the welfare and trade balance of different economic sectors, based on the Global Trade Analysis (GTAP) model and GTAP 10 DataBase, in 4 scenarios (25%, 50%, 75% and 100% reduction of tariff rates) with GEMPACK software package. The results indicate that reducing the tariffs in the agricultural sector positively affects Iranian welfare, and the higher the degree of trade liberalization, the higher the welfare, and reducing the tariffs in the agricultural sector positively affects changing the trade balance of industrial, services, and oil and gas sectors. However, it negatively affects changing the trade balance of the agricultural sector. Also, the reduced tariffs in the industrial sector negatively affect Iranian welfare, and the reduced tariffs in the industrial sector negatively affect changing the trade balance of this sector. The reduced tariffs in the agricultural sector have a low effect on the value of Iranian exports in this sector, and only the value of Iranian imports in this sector increases, and the most effects of reduced tariffs in the agricultural sector are reflected in the industrial sector.

Keywords

Main Subjects

References

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