News ID: 120574
Published: 0245 GMT June 21, 2015

Eliminating export restrictions

Eliminating export restrictions

Iranian exporters maintain that the government is required to remove export restrictions as a new trade policy.

Trade Promotion Organization of Iran has proposed that the government should levy taxes on the export of raw materials rather than suspending the entire process to properly manage overseas sales.

The imposition of tax, however, has to be in compliance with the mechanisms set by the High Council of Economy.

Currently, no limitations are placed on the export of industrial product. The TPOI is in consultations with the Ministry of Agricultural Jihad to lift bans on the exports of certain crops.

The lifting of the export restrictions is among the most important trade strategies of the 11th government.

At present, basic goods and genetic products are subject to export restrictions.

In March 2014, Minister of Industries, Mines and Trade Mohammadreza Nematzadeh announced that as stipulated in the Fifth Five-Year Economic Development Plan (2010-15) export limitations would be lifted entirely in the year to mid-March 2015.

A large number of traders believe that many items have been excluded from the banned list. Yet, exporters are seriously against the imposition of heavy tariffs on exports.

Some of the banned restricted items are wheat, flour, unprocessed sugar, red meat, barley, soy bean press cake, oil seeds, butter, cooking oil, livestock, rawhide, baking soda, sodium carbonate, firewood, coal and vinyl acetate monomer.

Earlier, goods such as sugar, sugar cube, milk, sweets and chocolate were also on the list but were removed.

Boosting non-oil exports is among the most important strategies of President Rouhani's administration. State officials believe that some export restrictions are not plausible.

Valiollah Afkhami-Rad, TPOI head, said the government has focused its efforts entirely on improving and increasing the export of non-oil goods, particularly those which create more value-added.

Also, the Iranian parliament, in view of the Fifth Five-Year Plan, has stressed that limitations should not be imposed on the export of any domestic products on the pretext of regulating the market and balancing supply and demand.

Price changes caused in the market by the export of a certain item are not logical to affect exports.

"In a meeting with the deputy agricultural Jihad minister," the TPOI head said, "I stressed that we are not allowed to restrict overseas sale of any items. We maintain that there would be no exports without imports. We think that Iran is the only country which is interested in raising exports. Other countries are also keen on exporting products to Iran. Our export destination also sees us as its target market. We are required to strike a fair balance in foreign trade to create a win-win situation. It is often asked why foreign companies are allowed to advertise their products in Iran? While it is quite clear that foreign goods are imported in total concordance with Iranian rules and regulations and moreover, Majlis has also permitted to regulate imports according to the tariff system."

Afkhami-Rad urged the producers to submit logical evidence to convince the government to impose further import tariffs, if they hold that the manufacture of a domestic product has been adversely impacted by the import of certain items.

He added the government will handle the issue based on the tariff mechanism.

"If a producer thinks that the tariff system does not support it favorably, it can hand over its request to the Majlis. If needed, we will raise tariffs. Iran is among the countries with the highest tariffs. Reducing domestic production costs, in case Iranian products are not competitive enough compared to their foreign counterparts, will not resolve the issue."

Earlier, Nematzadeh said Europe will become the main destination of Iranian products once the sanctions are lifted, pointing to Italy's rank among Iran's top 10 trade partners.

He noted since March 20, 2015, China has become Iran's top trade partner by importing 26 percent of the Iranian products. Iraq (17 percent) and Italy (1.5 percent) are Iran's second and ninth partners, respectively.

Afkhami-Rad also said currently, Iranian goods have managed to enter European markets.

Commenting on restricted goods and their high export taxes, Mohammad Lahouti, vice president of Iran Export Confederation, said, "Based on the Fifth Plan, only subsidized goods and genetic products, such as caviar, are subject to export restrictions. The procedure for implementing a plan is very important. When we impose a tax of up to 80 percent on exporting a product, it would not be much different from restricting its exports. This is sometimes very harmful and can lead to smuggling. We are against paying export taxes. It has to be clarified whether taxes are aimed at raising the government's income or shoring up the industry."

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