Assessing the Effect of Iran’s Membership in Trade Agreements on Saffron Exports

Developing countries try to attend in trade agreements to achieve safer target markets and reduce trade barriers. Iran also is in trade agreements such as economic cooperation organization (ECO) and global system of trade preferences (GSTP). While there is generally believed that presence in trade agreements generally has positive effect on countries trade flows, there is no any guarantee for positive effect on all countries and products. So, due to the importance of saffron exports for Iran, the aim of this paper is to answer the question of whether Iran’s membership in trade agreements has led to increase the saffron exports to member importing countries. For the purpose, gravity model and saffron exports data in the period of 2001-2014 are used. The results showed that income and population of saffron importers has positive and significant effects, while geographical distance and economic crisis has negative and significant effects on saffron exports. Based on the results, Iran’s membership in trade agreements has significantly negative effect (-3.475) on Iran’s saffron exports. In other words, membership in trade agreements cannot lead to increase Iran’s saffron exports to member trading countries in agreements. Therefore, it is suggested that exporting companies of saffron use the opportunities provided by participating in these trade agreements to take appropriate marketing policies and strategies in order to increase Iran's saffron exports to member trading partners in the agreement.