The Effects of Establishment Preferential Trade Agreement Between Iran and EU on Agricultural Products Trade: An Analysis Simulation



Given the importance of agriculture in the economic development and growth of developing country, including Iran, in this article, has been studied preferential trade agreement between Iran and European union as the biggest partnership for Iran, on Iran's trade flows and balance in agriculture. For this purpose, using a partial equilibrium SMART model, trade creation and diviation effects of trade is estimated in the agricultural sector of Iran and European Union member countries to reduce tariffs under the two scenarios (50 and 100 percent). The results of the agreement cause to increase trade volume and export agricultural products in Iran. Due to higher average agricultural tariffs of Iran to Europe, after the agreement, products import of Iran is more than export of this product and therefore trade balance will be negative. According to the designed scenarios, the most accessing of Iran will be to markets of Germany, Italy, Netherlands, France, Britain and Ireland.