A Survey on the Grounds of Iran-Turkey Trade Cooperation for Reaching a Bilateral Preferential Trade Agreement

Abstract

This paper surveys the grounds of Iran-Turkey trade cooperation in terms of ex-post indicators such as complementary trade index and trade potential index(based on HS 6-digit cods) during 1999-2003. The results show that Iran and Turkey enjoy complementary trade in the field of oil and non-oil goods. This is particularly obvious in the field of mechanical and electronic machinery and equipment. The calculations indicate that Iran's import and export potentials in trade with turkey are $4.7 bn and $1.4 bn respectively. Despite the considerable potentials in bilateral export and import of non-oil goods, both countries' policies have failed to take advantage of existent trade capacities. Therefore, the adoption of trade cooperation expansion policies in the form of preferential trade arrangements could facilitate and enhance trade flows between two countries.