Pathology of the Memorandum of Understanding on Preferential Tariffs of the Islamic Republic of Iran and Uzbekistan: Looking at the Capacity of the Agricultural Sector

An examination of the development of bilateral agreements has shown that countries have been paying increasing attention to concluding bilateral agreements and new regionalism over the last few decades. Iran, like all the countries, has been aligned with this trend and has signed agreements to expand its trade relations with the neighbor countries. One of these is the preferential tariff agreement with Uzbekistan, which was signed in 2003 by the concerned parties. After the conclusion of any agreement, it is important to consider the extent to which the agreement has been able to cover all the intended objectives or to what extent it has been effective in this regard. In this study, using the Smart model, various dimensions of this agreement were considered. The required data included the import and export statistics of the two countries from 2003 to 2016. The results showed that during the first five years of the agreement, the bilateral trade balance was in the interest of Uzbekistan, and this agreement could not work for Iran, due to the poor selection of goods for tariff rebates. In fact, the amount of applied discounts did not have the required degree of expertise, which failed to help Iran's trade. Therefore, in addition to changing the Iranian list of goods, it was suggested that the tariff reduction should be designed to help improve the business relations of both countries. According to the study results, it is possible to use the export capacities of the Iranian products in the agricultural subsectors (e.g. poultry, wheat, sugar and its derivatives and food products) in modifying the list of selected products of the agreement.