As the Turkish side put it, they not only intend to expand bilateral commercial ties, but also further improve Ankara-Tehran foreign relations.
“Iran is our threshold to Asia and we believe Turkey is, on the other hand, Iran’s gateway to Europe,” Chairman of Iran-Turkey Business Council affiliated with Turkey’s Foreign Economic Relations Board Umit Kiler said in the meeting held on Sunday.
The official, who headed a Turkish economic delegation to Iran, added that Turkish companies have invested more than $1.5 billion in Iran, as Turkish construction companies have close to $4 billion worth of projects running in the Islamic Republic, according to Financial Tribune.
"Yet, given Turkey’s capabilities, these investment figures are very small and should increase," he was quoted as saying by the news portal of ICCIMA on Monday.
“With a population of 80 million, Iran accounts for only 3% of Turkey’s foreign trade that is insignificant. To top that, this share has decreased by 7% in recent months compared with the similar period of last year.”
Kiler noted that their private sectors must strive to arrive at the $30 billion annual trade targeted by the two countries’ presidents.
Iran’s trade with Turkey stood at $10.75 billion in 2017, registering an increase of 11.24% compared to 2016, according to Turkish Statistical Institute.
During the year, Iran exported $3.25 billion worth of commodities to the neighboring country, down by 34.36% year-on-year.
A total of $7.49 billion worth of Turkish goods were imported into Iran during the same period to register a 59.42% rise YOY.
According to Tasnim News Agency, Iran was Turkey’s eighth biggest export destination in 2017, accounting for 2.1% of Turkey’s total exports during the year.
> PTA at Stake
Kiler said 61 out of 125 categories of goods listed for Turkey in the Iran-Turkey preferential trade agreement are among the items for which Iran has set an import ban.
“This has prevented $350 million worth of Turkish goods from acquiring import permits into Iran in the current year. We request that Turkish goods be exempt from the import ban list,” he said.
The Iranian government banned the imports of 1,339 commodities categorized as “non-essential goods with domestic counterparts” in June. The move to ban imports is said to be aimed at economizing on foreign currency.
The PTA between Iran and Turkey was first signed in January 2014 and took effect a year later. The two sides have 265 categories of goods under their PTA. Iran accounts for 140 and Turkey for 125 categories in the list.
In the field of money transfer, said Kiler, there’s a lot of pressure on businesspersons from both sides and this is because banks cooperating with Iranian banks face a lot of difficulties.
“We are aware of this hampering factor and have held meetings with Iran’s Consulate and Embassy in Turkey, CEOs of Iranian banks active in Turkey as well as CEOs of Turkish banks to find ways around the problem.”
> US Sanctions Countermeasures "Temporary"
Pedram Soltani, vice chairman of ICCIMA, said Iran’s economy is in a critical and sensitive stage and that some of the issues put forward by the Turkish side are among measures taken by the Iranian government to alleviate any damage caused by the reimposition of US sanctions against the country.
“These issues and the consequent measures are temporary. Foreign exchange problems and import bans are among the subjects ICCIMA is negotiating with the government to be rectified or revised,” he added.
Soltani further said that at the end of the day, the main bottleneck in Iran-Turkey commercial relations is banking problems.
“Unfortunately, Turkish banks refrain from opening accounts for Iranians. We have a monetary agreement in place and don’t need to use currencies other than our local ones. Yet, Turkish banks do not cooperate with their Iranian counterparts and this agreement has been left unused," he said.
"My request is that the current delegation goes back to Turkey with solutions to these baking handicaps and does all that is in its power to resolve these problems with the Turkish government and banks.”
The official said Iranian businesspeople want cooperation to expand in the fields of logistics and transportation.
“We want to be able to use Turkey’s ports and free trade zones for the transit of goods. Iranian traders have problems in exporting agricultural products to Turkey, which has set limitations on agro imports. We request that the Turkish side show more flexibility regarding the issue," he said.
Soltani concluded that the private sectors of the two countries must engage in talks with their respective governments to do away with commercial stumbling blocks.
> Trilateral Agreement to Trade in Local Currencies
Turkey, Russia and Iran reached an agreement to conduct bilateral trade in their own currencies and to avoid the use of US dollars, Turkey's state-owned Anatolia News Agency reported last month.
Anatolia quoted the governor of Iran's central bank, Abdolnasser Hemmati, as saying an agreement had been reached, which included all trade in petroleum, natural gas and other commodities, as well as banking issues and that meetings have been planned between officials of the three central banks to finalize details.
Hemmati added that trade would be conducted at agreed exchange rates.
The announcement of the agreement followed a meeting between Iranian President Hassan Rouhani, Turkish President Recep Tayyip Erdogan and Russian President Vladimir Putin in Tehran.
The agreement comes at a time of great volatility for the Turkish lira, which has lost 40% of its value against the dollar since the start of the year, due in part to a confrontation with the US over Ankara's refusal to reimpose sanctions on Iran.
Iran and Russia are two of Turkey's main crude oil suppliers.