Trade Liberalization under BRICS Plus Membership and Its Effects on Iran’s External Trade: A GTAP-Based CGE Scenario Analysis

Document Type : Research Paper

Authors

1 Department of Economics, SR.C., Islamic Azad University, Tehran, Iran.

2 Department of Economics, Faculty of Economics, Allameh Tabataba’i University, Tehran, Iran.

3 Department of Economics, Faculty of Economics, Allameh Tabataba’i University, Tehran, Iran

Abstract

This study examines the impact of bilateral tariff liberalization between Iran and BRICS Plus members on Iran’s trade balance, exports, and imports using a multiregional computable general equilibrium model based on the Global Trade Analysis Project framework and the version 10 database. The model is calibrated to accurately reproduce the base-year equilibrium of the Iranian economy and its trade structure, ensuring internal consistency between observed data and simulated outcomes. A set of comparative-static tariff reduction scenarios, ranging from partial to full liberalization, is implemented to capture the structural responses of trade flows to changes in trade policy. The simulation results indicate that reciprocal tariff reductions lead to a significant expansion in Iran’s total trade volume. Exports increase across all major sectors, with the strongest response observed in the industrial sector, followed by agriculture, reflecting improved market access and enhanced price competitiveness. At the same time, imports rise more rapidly than exports, particularly in industrial intermediate and capital goods, due to high substitution elasticities and strong input linkages within the production structure. As a consequence, Iran’s trade balance deteriorates across all liberalization scenarios, despite the observed expansion in exports. These findings highlight the structural characteristics of the Iranian economy within the BRICS Plus trade framework and underscore the importance of accompanying trade liberalization with policies aimed at improving domestic productive capacity and export composition. The results provide policy-relevant insights into the trade effects of Iran’s participation in BRICS Plus under static general equilibrium conditions.

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Main Subjects

References

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History

  • Receive Date: 30 December 2025
  • Revise Date: 08 June 2026
  • Accept Date: 13 June 2026

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