News ID: 154938
Published: 0704 GMT July 13, 2016

Iranian official: Iran-S. Korea trade to reach $5b by March 2017

Iranian official: Iran-S. Korea trade to reach $5b by March 2017

Trade between Iran and South Korea will reach $5 billion by mid-March 2017, indicating a 20-percent growth compared to the figure for the same period last year.

During March 20-June 20, 2016, transactions between the two states witnessed an increase of 14.7 year-on-year to reach $355 million, added Pouya Firouzi, the secretary-general of Iran-South Korea Business Council, in an exclusive interview to Iran Daily.

The July 14 nuclear deal between Iran and P+1 and, thus, the removal of trade restrictions on Iran are the two main reasons for the growth in exchanges, he said, adding the two countries aim to raise mutual trade to pre-sanctions era which will be quite achievable in the absence of banking barriers.

“A number of trade problems in the sides’ relations were due to the psychological impacts of Western sanctions which were resolved following the nuclear pact. Nevertheless, a number of the banking problems are still remaining. Efforts are underway to find a way around them by establishing direct banking and financial channels between the two states.”

Firouzi said in her recent visit to Tehran, South Korean President Park Geun-hye offered Iran a $25-billion package to shore up infrastructural sectors of the domestic economy and prepare the ground for the increased presence of South Korean companies in Iranian projects.

“In this trip, the two sides also signed 19 MoUs pertaining to petrochemical, agriculture, production and investment sectors as well as the transfer of technology.”

Firouzi said major South Korean producers of home appliances intend to expand their joint production with Iran, adding steel companies of the East Asian country also plan to invest in constructing, equipping and modernizing Iranian steel plants.

South Korean Posco — a multinational steel-making company headquartered in Pohang — has held negotiations to fund Iranian steel production projects.

Iran’s Trade Promotion Organization intends to dispatch an economic delegation consisting of traders, oil and banking officials as well as exporters of nuts and foodstuff to South Korea during late July or early August, he announced.

“Representatives of Iran-South Korea Business Council and a number of Iranian traders, who are members of the joint trade committee, will also accompany the team in its visit to Seoul.

“Iran and South Korea began to develop their bilateral trade relations in 1975, with exchanging delegations. Following this, Tehran and Seoul never severed their stable and progressing ties.”

Although in 2011, mutual transactions reached $18.5 billion, following the imposition of the embargoes in 2012, they witnessed a significant fall, he said, adding according to TPO, Iran-Korea’s non-oil trade stood at $5.4 billion in 2011.

“In 2012, Iran’s non-oil exports to South Korea amounted to $1.3 billion which dropped to $217 million in the first 10 months of 2015 due to the sanctions.”

Firouzi noted that trade balance between the two countries has always been in Iran’s favor including oil exports, adding excluding crude from the mutual transactions, the balance would be in South Korea’s favor.

He stressed that Iran plans to increase non-oil exports to South Korea in the post-sanctions era.

“In the year to mid-March 2015, the two countries’ non-oil trade stood at $3.8 billion, of which $134 million pertained to Iran’s exports to South Korea and $3.6 billion to Seoul’s overseas sales to Tehran.

“Iran’s export items include petrochemicals, agro products and nuts, particularly pistachio. South Korea exports home appliances and automobiles to Iran.”

He said the two countries set up their joint trade council after deciding to give a more significant role to their private sectors in mutual trade, adding the council is currently transforming into the two states’ chamber of commerce. “Currently, it has more than 70 active members.”

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