RESTRICTED
WORLD TRADE WT/L/78
25July1995
ORGANIZATION(95-2150)
Original: English
IRAN -REQUEST FOR OBSERVER STATUS
Thefollowing communication hasbeenreceived from thePermanent Mission oftheIslamic
Republic ofIran.
_______________
ThePermanent Mission oftheIslamic Republic ofIranhasthehonour tostatethefollowing:
TheGovernment oftheIslamic Republic ofIranasanobserver government totheGATT 1947,
incompliance withAnnex 2ofthedocument WT/L/28 concerning observer status intheWTO, would
liketo,hereby, apply forsuchstatus intheWTO General Council anditssubsidiary bodies.
ThePermanent Mission isfurther honoured toattach, herewith, adescription oftheIslamic
Republic ofIran'seconomic andtrade policies.
ThePermanent Mission would likealso,toinform theWorld Trade Organization Secretariat
thatthedecision pertaining tosubmission ofapplication foraccession totheWorld Trade Organization
Agreement iscurrently under consideration bytheGovernment oftheIslamic Republic ofIran.
_______________
Thenoteontheeconomic andtrade policies ofIranisreproduced hereunder.WT/L/78
Page2
ECONOMIC AND TRADE POLICIES OF
THE ISLAMIC REPUBLIC OFIRAN
Introduction
Theeconomic system oftheIslamic Republic ofIranhasundergone noticeable developments
during thepastsixyears inthecourse ofdiversification andlowering ofreliance onoilasanoverriding
source ofnational income.
With ratification andimplementation ofthesecond fiveyeareconomic, social andcultural
development planlastyear, greater emphasize hasbeen made towards creation ofamore vivid
environment fornurturing andpromoting theroleoftheprivate sector andenhancing theextent of
theactivities oftheplayers inthemarket while ensuring thatthecompetition drive isontherighttrack
andmarketforcesfulfiltheirfunctionstomeetadjustmentandtherequirementsofatransitionaleconomy
when necessary.
Thefollowing paper which iswritten tosupplement theIslamic Republic ofIran'sapplication
toobtain observer status attheWorld Trade Organization provides ageneral picture ofIran'strade
andeconomic situation andpolicies, taking intoconsideration thetransitional nature andscope ofsome
ofthecurrent plans andobjectives.
General Outline oftheCountry andherEconomy
Asthelargest country inWest Asia, Irancovers anareaof1,648,000 square kilometres and
apopulation ofaround 56million, 57percentofwhom liveinurban areas.
IranisborderedontheNorthbytheRussianFederation,TurkeyandtheformerSovietRepublics
ofTurkmenistan, Azerbaijan, Armenia, onthewestbyIraq,onthesouth byKuwait andother Persian
Gulflittoral States oftheUnited Arab Emirates, Qatar, Oman, Bahrain andSaudi Arabia, andonthe
eastbyPakistan andAfghanistan.
GDP andExports
Asthesecond largest producers ofoilinOPEC, Iranproduces around 3.6million barrels of
oilperday. Oilcomprises almost one-fourth ofIran'sgross domestic product.
Table 1
Staple Agricultural Production
(1000 tons)
1990 1991 1992
Wheat 8,012 8,793 10,359
Cotton (raw) 437 412 386
Rice 1,981 2,357 2,500
Meat 920 1,015 1,145WT/L/78
Page3
Table 2
Mining
(1000 tons)
1990 1991 1992
Steel 1960 2780 3500
Copper - 295 341
Aluminium 66.5 73.4 74.2
IronOre 2611 3997 5666
Gross domestic product (at1982 constant prices) wasequal to11,828.8 billion/Rials for
1991and12566.9billion/Rialsfor1992(atfactorcost)whilenon-oilgrossdomesticproductisestimated
at9308.1 billion/Rials for1991 and9997.6 billion/Rials for1992.
Adiversifiedclimatehasprovidedvastpotentialforawiderangeofagriculturalproductsranging
from grains andstaple foodtohighquality fresh produce fordomestic andforeign consumptions.
Agricultural andtraditional products comprise themajor bulkofIran'snon-exportable goods,
among which carpets stand formore thanhalfofthetotalexport income inthiscategory ofproduct
ataround 1.2billion dollars.
Table 3
Exports byCommodity Groups
(US$1000)
Agricultural andtraditional
goods1,959,884 2,076,630
Metal ores 39,222 35,592
Industrial goods 474,118 682,194
Miscellaneous goods 139,609 142,073
Regional Cooperation
Iran, together with Pakistan andTurkey, arethefounding members oftheEconomic
Cooperation Organization (ECO) which hasnowaccepted sixother nations ofCentral Asiaand
Afghanistan asmembers.
Through thisorganization andalsotheAsian Clearing Union (ACU), which isabanking and
monetary arrangement withcountries ofSouth andSouthwest Asia, theIslamic Republic ofIranplays
anactive roleintheexpansion ofregional commercial andfinancial exchanges. ECO andACU are
bothheadquartered inTehran.WT/L/78
Page4
Table 4
Distribution ofExports bycountries
(Percent)
1992
Germany 25
Turkey 12
Dubai 9
Italy 7.5
Switzerland 5.3
China 5
Russian Federation 4.6
France 3
Japan 3
United Kingdom 2.5
Others 23.1
Total 100.0
Macro Economic Policies
Thesecond fiveyeareconomic, social andcultural planoftheIslamic Republic ofIranwhich
hasbeenratified bytheParliament lastyearsetsthemany blueprints ofthenational economic and
trade policies forthenextfiveyears.
Themain directives oftheplancallforamore comprehensive utilization ofthefiscal and
monetarypolicytoolstocontrolinflationespeciallythroughcontrollingthegrowthrateofmoneysupply.
Ontheother hand, necessary measures shallbetaken under theplantobolster theinvestment
credits through thebanking system.
Decentralization ofthemarket structure andpromotion ofcompetition methods andpolicies,
comprise another important feature oftheplan.
Expansion andestablishment ofthenecessary frameworks foroperation ofvarious markets
inthefieldofcommodities aswellascapital isonemajor priority which isattributable tothecurrent
competition policy inIran.
Another priority, willbeenhancement ofsocio-cultural growth, sothatthelevel ofpublic
educationandhealthaswellashighereducationandresearchimprovethroughamoreefficientutilization
ofresources.WT/L/78
Page5
Thedevelopment plan, alsoweighs considerable importance forforeign trade through setting
amore favourable environment forcreation andpromotion ofcomparative advantages.
Theforeign exchange system ofmanaged floatwillbeapplied inforeign transactions through
which aunified exchange rateisintended tobeachieved.
Efficient conduct oftrading activities isanother goalwhich isplanned through streamlining
bureaucracy inoperations ofthecustoms.
Therefore, export/import restrictions areintended tobegradually reduced sothatitcovers
nothing beyond sanitary andphytosanitary standards aswellasthecountry 'smoral andreligious code
ofconduct.
Through theplanmore people aretobeencouraged toenter trading activities andinnovative
practices.
Moreover, freetrade zones inIranarecurrently formed andregulated topromote trade and
foreign investment through legislation which provide necessary legalcontext forprotection ofinvested
capitals.
Overall, theplansetsaseries ofguidelines forstreamlining government from onehandand
providing anenabling ground fortheprivate sector toparticipate inlucrative capital investments and
jobcreation, which inturncontributes tothefurtherance offoreign trade.
Table 5
Economic Structure
Gross National Product andIncome
ByEconomic Sectors atCurrent Prices
(Billion Rials)
1990 1991 1992
Agriculture 8,419.1 11,221.6 15,392.0
Oil 3,793.8 3,989.7 5,669.0
Manufacturing andMining 6,419.8 9,778.2 13,033.0
Mining 173.2 261.5 361.9
Manufacturing 4,413.9 6,833.2 9,218.0
Electricity, GasandWater 395.2 554.4 834.3
Construction 1,437.5 2,129.1 2,618.8
Services 17,398.9 24,192.6 32,585.6
Trade, Restaurant and
Hotel6,541.6 8,645.8 11,308.0
Transportation, Storage
andCommunication2,652.4 4,371.0 5,273.9WT/L/78
Page6
Financial andMonetary
Institutions358.2 540.4 711.7
RealEstate, Specialized
andProfessional Services3,937.9 5,358.3 7,383.7
Public Services 3,091.6 4,200.9 6,504.9
Social, Personal 817.2 1,076.2 1,403.4