PremiumEU ranks 3rd among Iran's top trade partners amid fresh sanctions concerns

Baku, Azerbaijan, Nov. 22

By Fatih Karimov – Trend:

The EU has become Iran’s third biggest trade partner amid concerns about a possible decision by the West to impose fresh sanctions on the Islamic Republic over its controversial missile program.

Paris has already suggested that new European sanctions against Iran could be discussed over its missile tests, something EU foreign policy chief Federica Mogherini seemed to dismiss last week, a sign that the EU officials try to not raise disputes with Tehran, while they are determined to revive their former position as Tehran’s first trade partner in the pre-sanctions period.

Mogherini said in 2016, during a visit to Tehran, that the 28-member bloc once again wants to become Iran’s biggest trading partner.

The EU's trade with Iran was subject to restrictions derived from United Nations Security Council (UNSC) sanctions between 2006 and 2010.

A group of EU and non-EU countries (China, France, Germany, Russia, the United Kingdom and the United States, with the European Union) and the Islamic Republic reached an agreement on Tehran’s disputed nuclear program, namely Joint Comprehensive Plan of Action (JCPOA) on 14 July 2015, which led to removal of sanctions in 2016.

Following the election of hardliner politician Mahmoud Ahmadinejad as president in 2005, and the heightening of political tensions with the West over Iran’s nuclear program, and imposition of the sanctions, trade relations between Iran and the EU went downward.

EU exports to Iran plummeted to 7.3 billion euros in 2012, down from highs of 11.3 billion euros in 2006.

In response, the Islamic Republic shifted its trade eastward, and expanded economic ties with countries such as China and India.

The international sanctions also increased the share of intermediary countries in Iran’s foreign trade. The economies of such as the UAE and Turkey, took the advantage of the sanctions, and acted as re-‎exporting intermediary to Iran.

The Islamic Republic’s latest statistics indicate that the condition is slightly changing almost two years after the removal of sanctions.

The EU stands third place among Iran's biggest trade partners, still far from restoring its leading place. First two spots are taken over by China and the UAE.

The EU countries exported over 4.012 million tons of goods, worth $5.655 billion, to Iran during the first seven months of the current Iranian fiscal year (started March 20, 2017), according to the latest statistics released by Trade Promotion Organization of Iran (TPOI).

The Islamic Republic’s imports from the EU registered a rise by 35 percent in terms of value and 45 percent in terms of volume compared to the same period of the preceding year.

The EU exports to Iran are mainly machinery and transport equipment (3.8 billion euros in 2016, 46.2 percent), chemicals (1.8 billion euros, 22.2 percent), and manufactured goods (0.7 billion euros, 8.8 percent).

Top goods exporters to Iran, based on the TPOI report:

In the meantime Iran’s non-oil exports to EU witnessed a significant fall by 18 percent to $754 million during the 7-month period.

The Islamic Republic exported 763,000 tons of various non-oil products to the EU countries, 27 percent less year-on-year.

Most EU imports from Iran are energy-related (mineral fuels), manufactured goods and food.

Top destination of Iran’s exports, based on the TPOI report:

Top trade partners of Iran (during the first seven months of current Iranian fiscal year) in million USD (including gas condensates)

As the date in the above table indicates, the axis of Iran’s foreign trade has slightly moved towards the EU following the removal of international sanctions, however China, Iran’s traditional trade partner under the sanctions also holds the first place, followed by intermediary UAE.

Turkey, another country, which played an intermediary role during the sanctions era, also is among the top trade partners.