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Misfiring trade policies could lead Iran to deeper trade deficit

Iran is working to develop non-oil exports in the face of US sanctions, but the country's trade policies are in dire need of reform before real progress will be feasible.
Iranian carpet vendors wait for costumers in the capital Tehran's Grand Bazaar on September 30, 2020. - According to Iranian vendors, carpets exports have decreased due to US-imposed sanctions. (Photo by ATTA KENARE / AFP) (Photo by ATTA KENARE/AFP via Getty Images)

With the reimposition of the harsh sanctions against Iranian oil exports in 2018 by the Trump administration, officials in Iran have focused on non-oil exports as the only viable way to meet the country's foreign exchange needs. But the country's trade policies have failed to resolve the bottleneck created in the absence of petrodollars.

In terms of commodity diversity, most of the country's non-oil exports are still dependent on oil and mineral products. These products cannot be considered industrial goods due to their low value add, as they are not upgraded into higher value products and thus bring in less revenue for the country.

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