News ID: 1576
Published: 0737 GMT September 15, 2014

Advantages of monetary treaty with China, Russia

Almost 50 bilateral agreements have been signed worldwide, more than half of which is in Chinese Yuan and currencies other than the US dollar. The last relevant monetary treaty was signed by Australia and South Korea.

Such treaties are an appropriate means to remove the US dollar from banking transactions and monetary exchanges. They help prevent the dollar domination and the US Treasury’s sanctions against other countries.

The contracts are also an appropriate strategy to boost economic ties between neighboring countries as well as countries sharing the same political and economic systems.

Geopolitical and diplomatic relations can help Iran draw up treaties with Russia and China. Negotiating a strategic trilateral treaty is also highly probable.

It seems that the following conditions must be met to create the appropriate ambience for signing such treaties:

First, diplomatic relations among the three countries must help adopt a new approach in foreign policy, which must be developed in the framework of nuclear negotiations and both bilateral and trilateral meetings.

Since the new administration took office, President Hassan Rouhani had at least three meetings with the Chinese president and two with the Russian president.

Second, the US and Western sanctions against Russia made the latter to go on the defense. For instance, Russia stopped its fruit and food imports from Europe, which paved the way for similar exports from Iran. The situation made Russia seek new economic partners in the region and the world.

The political and economic competition between Russia and the West is linked to factors, including the prolonged unrest in Ukraine and NATO's advance near the Russian borders. This made Russia remove the US dollar from its foreign trade to hurt the West.

Last but not least is Yuan’s faceoff against the US dollar, which has made the US and China serious competitors to grab world export markets.

Under the circumstances, a bilateral or even a trilateral treaty will help Russia and China strengthen their economic strategies vis-à-vis the US and the West. The treaty can also be a bargaining chip for removing the sanctions imposed on Iran.

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