Q1-3 Trade With EU Rises to €3.3b

Bilateral trade grew by 6.39% in September year-on-year to hit €376.05 million. 

Data released by Eurostat's database show Germany was the top trading partner of Iran in the EU, as the two countries exchanged €1.24 billion worth of goods, 5.24% less than the year before. 

Italy came next with €445.77 million worth of trade with Iran. A year-on-year comparison of the trade volume indicates an 11.04% decline. 

The Netherlands with €355.98 million (down 5.86%), Spain with €238.15 million (up 23.81%) and Belgium with €212.41 million (up 35%) were Iran's other major European trade partners.

Romania registered the highest growth of 301.26% in trade with Iran during the nine months under review. Estonia with 232.75% and Croatia with 132.34% came next. 

Eurostat is a directorate of the European Commission located in Luxembourg. Its main responsibilities are to provide statistical information to EU institutions and promote the harmonization of statistical methods across its member states and candidates for accession.

Organizations in different countries that cooperate with Eurostat are summarized under the concept of European Statistical System.

Iran exported €632.67 million worth of commodities to EU during the period, indicating a 14.09% growth compared with the similar period of 2020.

Germany with €204.26 million, Italy with €128.93 million, Spain with €59.41 million, Romania with €46.42 million and Belgium with €40.65 million were Iran’s main export destinations.

Iran exported €68.43 million worth of goods to EU partners in September, down 5.7% YOY. 

The main export destinations included Germany (€21.21 million), Italy (€14.04 million), Spain (€5.79 million) and Belgium (€2.49 million). 

Iran’s imports from the EU member states declined by 0.55% YOY to €2.72 billion. Germany accounted for the largest share of exports with €1.03 billion, down 6.2% YOY, followed by the Netherlands (€331.87 million), Italy (€316.84 million), Spain (€178.74 million) and Belgium (€171.77 million). 

Imports from the EU grew by 9.5% YOY to €307.98 million in September.

Trade between Iran and EU member states stood at €4.24 billion in 2020 to register a 13.35% decline compared with €4.89 billion in 2019.

Iran exported €618.03 million worth of commodities to EU last year, indicating a 7.18% fall compared with €665.8 million in 2019. Its imports from EU dropped by 14.32% to stand at €3.62 billion.

Trade between Iran and the EU gained momentum after Tehran signed the nuclear deal with six world powers in 2015. The deal formally known as the Joint Comprehensive Plan of Action saw years of international sanctions against the Islamic Republic lifted. In exchange, the country agreed to limit the scope of its nuclear program. JCPOA was implemented in 2016.

However, in 2018, Washington unilaterally quit JCPOA that it had signed with five other countries and Iran. The US then reimposed sanctions against Tehran, leading to a decline in Iran’s foreign trade, including with the EU.

US Think Tank Gauges Iran-EU Economic Ties

The EU invested considerable political and diplomatic capital in the long process that led to the 2015 nuclear accord. EU leaders had tried hard to convince the US twice-impeached president, Donald Trump, not to abrogate the deal and they have again invested considerable effort, since Joe Biden’s election, to serve as a middleman between Tehran and Washington, reads an article published by the US think tank the Foundation for Defense of Democracies. Excerpts follow:

All of this diplomacy invites an economic question: What can the EU expect to gain if trade and investment become possible in Iran with the lifting of US sanctions?

The history of Iran-EU trade over the last 15 years shows a downward trend, with a high degree of correlation with the severity of sanctions. When US-initiated secondary sanctions are in place, whether multilateral or unilateral, they quickly affect Iran-EU trade. 

EU states opposed the Trump administration’s unilateral maximum pressure strategy, but Trump’s sanctions had the same impact on Iran-EU trade as multilateral sanctions did prior to the JCPOA.

In 2013, at the height of the Obama administration’s sanctions campaign against Iran, EU imports from Iran dropped to €751 million from their zenith of €17 billion in 2011.

In 2019, the first full year that Trump’s maximum pressure strategy was in place, EU imports from Iran slid to €680 million, down from €9 billion in 2018. EU exports, while reduced due to US sanctions, have shown less volatility.

The EU’s 2013 exports plummeted to €5.3 billion from their high of €11 billion in 2010. These exports went back up to €11 billion in 2017 while the JCPOA was in effect, but in 2020 descended to €3.7 billion. Non-Iranian trade partners filled the gaps …

The greater volatility of EU imports from Iran stems from the impact of sanctions on the import of crude oil. Iran’s non-crude exports to the EU are neither considerable nor growing. They still have not returned to their 2007 level of €1.7 billion and in 2020 were slightly above €600 million.

European governments opposed Trump’s unilateral sanctions and tried to convince European companies to trade with Iran. However, the private sector defied Brussels and complied with Washington’s sanctions. 

Despite loose enforcement of US sanctions by the Biden administration, the data for the first seven months of 2021 show no significant increase in trade between the EU countries and Iran. During this time period, EU’s imports from Iran rose to €480 million, slightly higher than €440 million during the same period last year, while its exports dropped from €2.21 billion to €2.11 billion.