To develop trade relations with other countries, Iran concludes trade facilitation agreements in the form of tariff and non-tariff barriers reductio, including Malaysia. In order to expand its exports to Iran, this country has presented a list of its commercial goods in order to demand a reduction in Iran's import tariff from Iran and to be able to expand its exports with our country by receiving concessions. Malaysia's application list includes 319 eight-digit tariff codes (219 six-digit tariff codes), of which 19 are in the agricultural sector and 300 are in the industrial sector. Iran's tariff rate on these goods is between 10% to 55% and the average tariff rate is 31.8%. The share of the above items in Malaysia's exports to Iran during the period 2015-2018 is more than two thirds (66.9%) of the total exports of this country to us.

In order to determine the manner and amount of tariff concession (preferential tariff) granted by Iran to Malaysia, the method of posterior argument was used based on the degree of vulnerability of Iranian items from Malaysian exports to this country. In this method, seven variables of Share of the index of revealed comparative advantage of Malaysia to Iran; Malaysia average revealed comparative advantage index; Tariff on imported goods; Average Malaysian export potential to Iran; Growth rate of Iran's revealed comparative advantage; Malaysia's share of world exports; Trade creation (expected increase in Malaysian exports to Iran) became the basis for prioritizing goods in terms of vulnerability and sensitivity to imports of Iran from Malaysia. List of items of Iranian goods imported from Malaysia with the help of these indicators, they were prioritized to be included in the negative list of preferential tariffs. Ranked number one on this list is the need for the highest caution in offering preferential tariffs to Malaysia. Thus, the ranking of Malaysian commercial items was reversed to identify more suitable goods for tariff reduction.

In this regard, the items requested by Malaysia to gain points from Iran were divided into three groups. The first group, where it is possible to grant tariff concessions, includes 76 six-digit tariff codes (95 eight-digit tariff codes) that Iran can easily offer trade concessions to Malaysia. These items account for 1.2 percent of Malaysia's current exports to Iran, and the average Iranian tariff rate for this category of goods is 14.3 percent. The second group includes goods that Iran must exercise caution in granting tariff concessions. These goods include 97 six-digit tariff codes (150 eight-digit tariff codes) that Iran should consider trading Malaysia with some consideration. These items are equivalent to 13.4% of Malaysia's current exports to Iran and the average Iranian tariff rate for this category of goods is 32.8%. The third group includes goods that Iran must be strict in granting tariff concessions to Malaysia. These goods include 46 six-digit tariff codes (74 eight-digit tariff codes) that Iran must provide trade concessions to Malaysia under strict conditions. These items account for 52.4% of Malaysia's current exports to Iran and the average Iranian tariff rate for this category of goods is 49%. Third group, which will most likely increase Iran's imports from Malaysia if the tariff rate is reduced and Iran needs to be more careful in granting concessions to this country than other items, will most likely be more than Malaysia's requested goods. Because the largest volume of Malaysian exports to Iran during the period 2015-18 of these items and this country will expect Iran to receive points in this group more than other groups. On the other hand, Iran can either not make any concessions during the negotiations, or accept the lowest reduction in the group's tariff rate, or commit to a reduction in the group's tariff rate over a longer period of time.

Among the items requested by Malaysia to receive preferential tariffs from Iran, 110 items of the eight-digit tariff code are among the currently banned goods imported from Iran to the world, which must be taken in the process of granting concessions to this country to lift the ban.

It is worth mentioning that Iran will also provide a list of goods in order to request and obtain concessions from this country for the development of exports of these items to Malaysia. Certainly receiving concessions from Malaysia would be preferable to offering tariff concessions to this country.

Keywords: reduction of tariff and non-tariff barriers, preferential tariff, concession by Iran to Malaysia