News / Economy

Turkey Seeks Increased Trade with Iran

FILE - Turkey's Foreign Minister Ahmet Davutoglu and Iranian counterpart Ali Akbar Salehi, left, at news conference, Ankara, Jan. 19, 2012.
FILE - Turkey's Foreign Minister Ahmet Davutoglu and Iranian counterpart Ali Akbar Salehi, left, at news conference, Ankara, Jan. 19, 2012.
Dorian Jones
— Iran's recent agreement with world powers to curb parts of its nuclear program in exchange for a possible easing of sanctions has spurred hopes in Ankara of a major trade and finance opportunity.
 
Turkish Foreign Minister Ahmet Davutoglu recently traveled to Tehran, where he committed his country to a major expansion of trade, saying Ankara is determined to increase trade volume with Iran to over $30 billion and aims for $100 billion by 2020.
 
Trade volume between the neighboring countries volume now is around $20 billion, the bulk of that coming from energy-scarce Turkey's fuel imports.
 
Turkey is the biggest importer of Iranian gas.
 
Turkish economy minister Zafer Çağlayan has called on banks to reopen financial relations with their Iranian counterparts.
 
"Turkey has a very efficient middle value added manufacturing industry," said Atilla Yesilada, an analyst for political consulting firm Global Source Partners.
 
"Clearly our commercial agricultural fruits and vegetables are far superior," he added, explaining that there is a potential for substantial growth in Turkish exports to Iran. "There is tremendous overlap, and if Iran ever returns to the international order, it will have major program of renovating its refineries, developing its aging fields, etcetera. All of these things would be tremendously beneficial for Turkish economic actors."
 
According to Inan Demir, chief economist of Istanbul-based Finansbank, Turkish exports to Iran are already on the rise despite continued trade restrictions, a trend likely to continue with the easing of sanctions.
 
"This could help through exports to Iran, [although] it’s difficult to be very precise about the magnitude of higher exports," said Demir. "In the first nine months of the year, Turkey’s exports to Iran [totaled] $3.7 billion ... one the largest figures on record."
 
But Demir warns that Çağlayan's call to reestablish banking relations could have negative repercussions for Turkish banks if Iranian financial sanctions are lifted.
 
"Iran now will be able to repatriate some of its [foreign currency] holdings abroad as the sanctions are eased in a limited fashion ... and Turkey would be one of the source countries," he said. "So it's likely we could some outflows in [foreign currency] and gold, I would presume, as the sanctions are lifted and Iran is able to repatriate. So I think this another channel of impact that one should consider."
 
Ultimately, analyst Yesilada says how much bilateral trade grows is likely to be determined by politics rather than economics.
 
"There is really no guarantee that Iran would ever [have] Turkey [as] its primary trading partner," he said. "Iran perceives Turkey for what it is. We are a major stumbling block for their regional objectives and their de facto major rival in the region, an ally of the West. Unfortunately this is a region where trade, like anything else, is a diplomatic weapon. The market forces don’t work efficiently here."
 
Turkish-Iranian relations have been strained over Syria in particular, with Ankara and Tehran supporting opposite sides in the ongoing civil war. But the diplomatic rapprochement underway is one that, observers say, could bring economic gains.

You May Like

China Investigates Former Powerful Security Chief

Former security chief and member of Politburo Standing Committee, Zhou Yongkang, under investigation for suspected 'serious disciplinary violation' More

India, US Look to Reset Ties During Kerry Visit

This week's talks will be first high level interaction between two countries since Prime Minister Narendra Modi took charge More

Video Young African Leadership Program Renamed to Honor Mandela

YALI program, launched by President Obama in 2010, aims to build skills in business, entrepreneurship, public management and civic leadership More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Vietnamese Staging Chinese Product Boycott After Oil Rig Spati
X
Reasey Poch
July 28, 2014 7:18 PM
China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video ESA Spacecraft to Land on a Comet

After a long flight through deep space, a European Space Agency probe is finally approaching its target -- a comet millions of kilometers away from earth. Scientists say the mission may lead to some startling discoveries about the origins of the water on earth. VOA’s George Putic has more.
Video

Video Young Africans Arrive in US for Leadership Program

President Barack Obama's Young African Leadership Initiative has brought hundreds of young Africans to the United States for a six-week program aimed at building their knowledge and skills in fields such as public administration and business. Out of the 50,000 young Africans who applied for the program, just one percent was accepted. VOA's Laurel Bowman caught up with some of those who made the cut and has this report.
Video

Video In Honduras, Amnesty Rumors Fuel US Migration Surges

False rumors in Central America are fueling the current surge of undocumented young people being apprehended at the U.S. border. The inaccurate claims suggest the U.S. will give amnesty to young migrants from the region. As VOA's Brian Padden reports from Honduras, these rumors trace back to President Obama's 2012 executive order to halt deportations for some young undocumented immigrants already living in the United States.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.