A Study of the Role of Aras Free Trade and Industrial Zone in the Regional Trade Convergence with CIS Countries, China and Turkey

Document Type : Research Paper



Regional trade, boosted by trade integration and regional cooperation, is an important factor for countries trade growth. Free trade zones often facilitate trade between countries and increases trade. Aras free zone could works as a connecting bridge between Asia and Europe and enhances trade and economic growth. This study attempts to investigate the role and status of Aras free trade-industrial zone in trade development though the estimation of trade potentials with CIS countries, China and Turkey as the main trade partners in the region. The estimates of export and import potentials revealed the existence of high trade potentials between Aras free trade zone and aforementioned countries. Also, the results of trade complementarity estimates using cosine index indicated that Georgia, Azerbaijan and Kazakhstan had the highest export complementarity while, China, Turkey and Belarus had the highest import complementarity in the region. The study shows that given the current trade between Aras free trade zone and the countries, it is possible to increase trade volume by about ten folds.