Turkey, Iran seek to boost trade as mistrust lingers
Turkey and Iran have activated an accord to reduce tariffs and increase bilateral trade to $35 billion in 2015, but mistrust lingers between the two neighbors, with Turkey seeking international arbitration over the price of Iranian natural gas.
A preferential trade agreement that reduces tariff barriers between Turkey and Iran took effect Aug. 8. The agreement, which could lead to a kind of “commercial integration” between the two neighbors, was signed during Prime Minister Recep Tayyip Erdogan’s Jan. 28-29 visit to Tehran after negotiations that lasted 10 years. The preparations for the implementation of the accord took six months. In early August, an Iranian delegation led by Industry, Mining and Trade Minister Mohammad Reza Nematzadeh held talks with Turkish Economy Minister Nihat Zeybekci and other officials, after which the agreement formally took effect.
The two countries’ immediate objective is to boost their bilateral trade volume to $35 billion by the end of 2015 from $14.6 billion in 2013. The target was initially announced as $30 billion in January, but in his latest statement Zeybekci raised the bar to $35 billion, in an apparent sign of his growing optimism over the accord.
How is this target to be achieved? Does the accord contain a magic formula?
The deal was the first time that Turkey agreed to reciprocal tariff cuts in a framework other than free trade agreements. Under the deal, Turkey and Iran will reduce tariffs on certain agricultural and industrial products.
