Iran’s Trade Policies: Connecting to the Markets

Abstract

This chapter discusses the global structure of merchandise and services trade together with country-specific trade information to establish how a broad and multidimensional trade policy could contribute to Iran’s development objectives. It highlights the need for Iran to develop high value-added goods and services that meet quality standards. This entails a broader integrated policy mix with a focus on structural transformation that must be tailored to specific development needs and implemented coherently. Ensuring to harvest sustainable development benefits, it should include a set of macroeconomic, monetary, fiscal, labor, industrial, technology, trade, investment (public and private), services, infrastructure, regulatory, institutional, human resources, and social policies. Unilateral reform processes notwithstanding, bilateral, regional, and multilateral trade and cooperation agreements and frameworks are also required. Defying existing comparative advantages can support long-term development benefits, in particular, when it promotes higher value-added activities. Furthermore, the services sector has a key role in improving efficiency and competitiveness for all economic sectors as well as in structural transformation, diversification, and enhanced supply capacity and participation in the global and regional value chain. Services can further contribute to industrial policy, the financial sector, job creation, and competitiveness as well as to reducing poverty and improving access to health and education. The chapter’s recommendations for Iran include changing policy direction and establishing linkages and complementarities among its economic policies and sectors for inclusive and sustainable development and growth.