Review of Effects of Implementation of Regional Integration Agreements between ECO Countries

In the present study, effects of creation of regional integration agreements between ECO countries were assessed in the Smart partial equilibrium model. Therefore, the amount of trade creation and trade diversion was surveyed under the tariff reduction scenarios for trade of Iran and other members. The results showed that implementation of regional agreements between Iran and ECO countries; increases export of ECO countries to Iran than exports of Iran to ECO countries is higher. Therefore, reducing tariff rates in the form regional integration agreements, Iran will face with trade deficit equivalent to 24.472 million under the first scenario and 48.945 million dollars in the second scenario. Also, the results showed that a major part of the increase of imports due to trade creation and consequently increase imports from countries of ECO will be. So in order to obtain benefit of tariff rates reduction in regional integration agreements is recommended increasing regional trade and improvement of its structure in planning future for development of regional cooperation.