YEREVAN — Businessmen from Iran urged their Armenian partners on Tuesday to invest in an Iranian tax-free economic zone adjacent to Armenia, saying that would boost the relatively modest trade between the two neighboring states.

They promoted the Aras Free Trade-Industrial Zone (AFTIZ) bordering Armenia during an Armenian-Iranian business forum that began its work in Yerevan. Some 60 Iranian entrepreneurs took part in the forum. Armenia was represented by over 100 businessmen. Armenian Deputy Minister of Economy Ara Petrosian noted in his opening remarks that there is still a great potential for the development of economic relations between the two countries.

The AFTIZ director, Sadegh Najafi, said Armenian businesspeople could use the tax haven for not only importing goods but also manufacturing operations. “All foreign citizens can set up companies in that free trade area within 24 hours,” Najafi said. “Such companies would be exempt from all taxes and duties for 25 years.”

Armenian participants promised to consider this offer. Some of them voiced misgivings, though, saying that manufacturing is underdeveloped in Armenia because of the country’s difficult geographical position and problematic business environment. “Since the country is blockaded we are afraid of not being able to export products,” one of them told RFE/RL’s Armenian service.

According to official Armenian statistics, the total volume of Armenian-Iranian trade stood at around $318 million last year, a slight decrease from 2011. The governments of the two countries hope that multimillion-dollar projects implemented by them in the energy sector will significantly increase bilateral commercial exchange. In Najafi’s words, utilizing the AFTIZ would also give it a major boost.

Iran has offered to sign a free trade agreement with Armenia in the past. Discussions held by the two sides on the issue yielded no agreement. Armenian officials said in 2010 that free trade terms proposed by the Iranians are not acceptable to Yerevan.

Unlike Armenia, Iran is not a member of the World Trade Organization and tends to pursue protectionist trade policies.

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