33% Decline in Iran's Trade With Turkey

EghtesadOnline: Iran’s trade with Turkey totaled $4.47 billion during the first eight months of 2019 to register a decline of 33.87% compared with the corresponding period of 2018, data released by Turkish Statistical Institute show.

News ID: ۷۸۴۹۱۹

06 October 2019

Iran exported $2.9 billion worth of goods to Turkey during the period under review, indicating a 42.98% decline year-on-year.

Imports stood at $1.56 billion, down 6.02% YOY.

Iran was Turkey’s 19th biggest export destination and 16th biggest exporter of goods to the country during the period under review, according to Financial Tribune.

Iran’s exports to Turkey in August alone amounted to $85.76 million, down 84.66% YOY while imports from the neighboring state during the month went up by 4.83% YOY to $172.66 million.

Data released by the Islamic Republic of Iran Customs Administration on Iran's non-oil trade show liquefied natural gas, non-alloy zinc, aluminum, urea and bitumen were Iran’s main goods exported to Turkey, while Turkey exported mainly cooking bananas, tobacco and fiber during the last Iranian year (March 2018-19).

Tehran and Ankara have ramped up efforts in recent years to boost trade, setting a $30-billion annual target and signing several agreements to enhance cooperation in various fields.

Turkey is one of Iran’s major trading partners in the region, which has come under pressure from Washington to stop working with Tehran under a fresh wave of US anti-Iran sanctions.

Turkey has emphasized that the US demands to stop purchasing oil and gas from Iran would not be heeded by Ankara.

Joint Economic Commission Meetings in Ankara

Ankara hosted the 27th meeting of Iran-Turkey Economic Commission last month.

The commission was co-chaired by the Chief of Staff of Iranian President Mahmoud Vaezi and Turkish Minister of Energy and Natural Resources Fatih Donmez.

A high-ranking delegation of Iranian ministers and officials accompanied Iranian President Hassan Rouhani during his visit to the country.

The delegation included Minister of Foreign Affairs Mohammad Javad Zarif, Defense Minister Amir Hatami, Energy Minister Reza Ardakanian, Agriculture Minister Mahmoud Hojjati and Governor of the Central Bank of Iran Abdolnasser Hemmati.

Rouhani arrived in Turkey to take part in a trilateral meeting with his Russian and Turkish counterparts to discuss a political resolution to the crisis in Syria.

A joint meeting between high-ranking Iranian and Turkish delegations was held in the presence of President Rouhani and President Erdogan in Ankara.

Vaezi said that the Iranian government is determined to promote economic and political relations with Turkey at the bilateral and regional levels.

In a meeting with Turkish Minister of Transportation Jahed Turan, he noted that the two governments’ determination for having strategic relations is the biggest backbone for implementing the ratifications of the joint economic commission.

The official appreciated the Turkish government’s support in times of sanctions, hoping that High Council of Iran-Turkey Strategic Relations will convene in Tehran in the coming months.

Turhan said the transportation committee in the joint commission has reached an agreement, the implementation of which will serve as a big step in road communications and rail and air transportation between the two countries.

Recalling the two countries' great capacities for promoting bilateral and regional transit relations, he said mutual cooperation is continuing in a friendly manner.

Turhan also hoped that the outcome of joint commissions will help use all capacities and step up collaboration in the field of transportation.

In a separate meeting, Vaezi and Donmez discussed ways of developing economic cooperation.

Vaezi said there is no limit for Iran to develop ties with Turkey.

Referring to the trilateral meeting among the presidents of Iran, Turkey and Russia in the Turkish capital, Vaezi said, “The negotiations were a golden chance to expand relations and remove the existing barriers. Despite the US sanctions, ties are developing between Iranian and Turkish private sectors and there are no restrictions on Iran to economic reinforce ties with Turkey.”

The Turkish minister vowed that the Turkish government will do its best to improve its Iranian economic ties based on previous agreements.

He reiterated that Turkey pays no attention to the US-led sanctions imposed on Iran.

As to the diversification of their economic and commercial cooperation, Secretary of Iran-Turkey Economic Commission Bahman Hosseinpour said five financial, banking, energy, transit and health working groups were formed to monitor developments unfolding in the respective sectors and settle them.

Railroad Connection

In separate remarks, Vaezi said Tehran-Istanbul train will come on stream in the near future.

Passenger train services resumed on Tehran-Tabriz-Van Railroad on June 24 after they were suspended for nearly four years. Those on Tehran-Ankara route resumed on Aug. 7. The services have been scheduled to run on a weekly basis.

Train services between Iran and Turkey were suspended in 2015 due to security concerns about terrorist attacks on the route.

According to the World Travel and Tourism Council, Turkey was the most popular overseas destination for Iranian travelers in 2018, accounting for 41% of all overseas visits.

Turkey’s largest city Istanbul, the eastern province of Van and the southern province of Antalya are the most popular destinations for Iranian vacationers.

The country was the third biggest source of tourism to Iran last year after Iraq and Azerbaijan, accounting for 8% of all foreign tourists who visited Iran in 2018.

Using Nat’l Currencies in Bilateral Trade

Governor of the Central Bank of Iran Abdolnaser Hemmati has said that during the meeting held between the presidents of Iran and Turkey on the same day in Ankara, the two sides focused on expansion of trade and banking ties, besides doing monetary transactions via rial or lira.

“Mutual talks between Iranian and Turkish presidents, held today, mainly revolved around improvement of economic, trade and banking relations between the two sides, besides enhancement of bilateral trade volume and removal of banking difficulties, and in particular, development of cooperation between the central banks of the two countries to increase common monetary transactions through national currencies,” Hemmati wrote on social media.

Earlier in April 2019, Turkish Foreign Minister Mevlut Cavusoglu said Turkey is taking into account new trade mechanisms with Iran, like the INSTEX system set up by European countries, to avoid US sanctions reimposed last year on Iranian oil exports.

Cavusoglu reiterated Turkey’s opposition to the sanctions and said Ankara and neighboring Iran needed to keep working to raise their bilateral trade to a target of $30 billion, around triple the current levels, according to Reuters.

“Along with the existing mechanisms, we evaluated how we can establish new mechanisms, like INSTEX ... How we can remove the obstacles before us and before trade,” Cavusoglu told a news conference after talks with his Iranian counterpart, Mohammad Javad Zarif.