News ID: 232521
Published: 0342 GMT October 09, 2018

Post-JCPOA figures show Iran-EU trade a two-way street

Post-JCPOA figures show Iran-EU trade a two-way street

A few months ago, a number of visiting European businessmen and traders explicitly told the Persian daily Iran that, despite the reimposition of US sanctions and Washington's threats, they are keen on economic cooperation with Iran only in case they can transfer money to and from the country.

A few days ago, Hossein Salimi, the vice president of the money and capital market committee of Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIM), confirmed the same statement about the attitude of the Europeans toward the second round of US unilateral sanctions against Iran in an interview with the Persian language newspaper.

The biggest obstacle to boosting Iran-Europe trade will apparently soon be removed now that the Iran's Parliament, on Sunday, voted in favor of Tehran joining the Combating the Financing of Terrorism (CFT), a prerequisite to joining the Financial Action Task Force (FATF), and the Iranian banks are about to become further committed to incorporating the principles of financial transparency in the their systems.

On the other hand, in late September the European Union's foreign policy chief, Federica Mogherini, announced that the bloc was creating a new payment mechanism called the 'special purpose vehicle' (SPV) to allow countries to transact with Iran while avoiding US sanctions.

In addition, French Economy and Finance Minister Bruno Le Maire said on Friday, "I am convinced that the outcome of that crisis with Iran will be the chance for Europe to have its own independent financial institutions, so we can trade with whoever we want," adding, "It is not up to Washington to decide whether we are allowed to trade with Iran."



Pre-sanctions trade ties

Iran-Europe trade over the past year has seen many ups and downs. According to figures by the Islamic Republic of Iran Customs Administration (IRICA), annual exports from Iran to the EU have been on a declining trend since 2010, reaching its nadir, $900 million per annum, over the past few years in 2013. After four consecutive years, eventually in 2014, the value of transactions between the two sides witnessed a 66-percent growth to reach $1.5 billion from $900 million.

Likewise, Iran's annual imports from the EU, which stood at $8.9 billion in 2011, reflected a slightly declining trend until 2014, when after three years, its value exceeded $9.5 billion showing a 7.6-percent growth.

Following the signing of the Joint Comprehensive Plan of Action between Tehran and P5+1, in July 2015, Iran-EU trade posted further growth to amount to €21 billion in 2016 according to Eurostat in 2017.

The figures pertaining to trade between Iran and the EU after the signing and, later, the implementation of the JCPOA show that despite US May 8 pullout from the Iran nuclear deal, transactions between the Middle Eastern state and European countries has never suffered a fall, continuing a growing trend.



17-percent growth

Latest foreign statistics show that trade between Iran and the EU during the first two months of 2018 reached €3.74 billion, indicating a 17-percent increase year-on-year.

In this period, Iran imported goods worth €1.57 billion from the EU and exported €2.17 billion worth of products to the bloc's 28 member states. According to TCCIM, the dominant factor for the increase in the said time-span was the €523-million rise in Iran's goods exports to the EU, of which 89 percent pertained to overseas sales of mineral fuels and plasticizers.

Latest IRICA figures show that during March 21-June 21, 2018, the EU trade accounted for 27.6 percent of Iran's total international transactions. Iran's trade with 11 Europeans states in this duration stood at more than $3.1 billion. The value of the country's exports to Germany, Switzerland, Russia, France, Italy, the UK, the Netherlands, Belgium, Spain, Sweden and Austria in the same period amounted to $222 million.

In terms of exports to Iran, Germany ranked first in this duration, by selling products worth $573 million (5.1 percent of the total trade figure) to the country and Austria with $93 million (0.8 percent) worth of exports ranked 11th.

In the same time-span, Iran exported products valued at $248 million to European states. In this period, Italy was Iran's main export destination. It imported goods worth $162.12 million from Iran during March 21-July 22, 2018.

Iran's major export items to Italy included iron, steel, animal hide and handwoven carpets. In the same time-span, France imported goods valued at $15 million from Iran, of which more than $9 million pertained to petrochemical purchases. Russia purchased products valued at $94 million from Iran in this period, of which fruits and agro crops constituted more than $55 million.

In the same four-month period, the Netherlands and the UK purchased Iranian goods worth $18 million and $15.31 million, respectively, the former mostly iron products and the latter dates, saffron and carpets, in addition to iron products.

In this duration, Belgium imported commodities worth $31.71 million from the Middle East state, whose overseas sales to Spain, in the same period, amounted to €42 million, of which more than €17 million pertained to saffron, rose and sugar purchases.

Sweden's share of Iran's exports to Europe during March-July, 2018 was $3.73 million. In this period, the European country imported saffron worth over $1.2 million from Iran.

Iranian exports to Sweden in this time-span, however, failed to be more than $1.7 million, of which $800,000 pertained to the European state's purchase of floor coverings and foodstuffs.

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