• Monday, May 27, 2019

Turkish-Iranian trade disappoints big time

Discussion in 'Middle East & Africa' started by Jyotish Kailashkumar, Mar 16, 2019.

  1. Jyotish Kailashkumar

    Jyotish Kailashkumar SENIOR MEMBER

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    Turkish-Iranian trade disappoints big time

    Mehmet Cetingulec

    March 15, 2019

    Turkey and Iran have maintained cooperation in regional affairs in recent years, including most notably joint efforts for a settlement in Syria but also solidarity against US and Israeli policies in the Middle East. Earlier this month, Turkey’s interior minister even raised the prospect of a joint operation against Kurdish militants.

    The political solidarity has been widely expected to strengthen bilateral trade, with a number of steps taken to that effect. In 2015, a preferential trade agreement between the two neighbors lowered tariffs on 125 industrial and 142 agricultural products. Two years later, a swap agreement took effect to allow the use of national currencies in bilateral trade.

    When introducing the preferential trade agreement, the two countries had set a target to boost the volume of bilateral trade to $35 billion. Four years on, the result is a disappointment in full measure. In 2018, bilateral trade was worth $9.3 billion, the lowest level over the past nine years.

    Official Turkish statistics show a steady downtick since 2012, when the bilateral trade volume peaked to $21.9 billion after exceeding $10 billion in 2010.

    Turkey’s exports to Iran, which had hit $9.9 billion in 2012, stood at $3.3 billion in 2017 and $2.4 billion in 2018. Imports from Iran, meanwhile, were worth $7.5 billion in 2017 and $6.9 billion in 2018, down from $12.5 billion in 2011.

    Many had hoped that with the Iranian rial and the Turkish lira at play, commercial ties would become easier and boost the volume of trade. The hopes, however, have not materialized. Iran ranks 19th among the top 20 buyers of Turkish goods and, despite oil and gas sales to Turkey, ranks 10th among the largest exporters to its western neighbor.

    Still, the trade balance is in Iran’s favor, with Turkey running a deficit of $4.5 billion last year.

    The downtick in bilateral trade has continued this year. In January, Turkey’s exports to Iran fell 27% to $191 million and its imports decreased 16% to $485 million.

    The decline in commercial exchanges has to do with hitches in the functioning of the preferential trade agreement, which took effect in 2015. Fatih Cayabatmaz, the Tehran representative of Turkey’s Independent Industrialists and Businessmen Association, has warned that the worst might still be ahead.

    “Iran banned the importation of 339 products, among them 61 products within the scope of the preferential trade agreement,” Cayabatmaz told Anatolia news agency in January, adding that the association had asked the competent Iranian authorities to lift the ban and that the issue had been discussed also between the two countries’ presidents. “Bilateral accords such as the preferential trade agreement are international agreements that cannot be repealed with decrees. We’ve communicated this to the Iranian authorities,” he said.

    But as the Turkish side awaited a solution to the problem, the Iranian parliament delivered another blow to bilateral trade, approving legislation that bans until March 2021 the import of goods that have locally produced equivalents to meet the needs.

    Cayabatmaz argued that countries with preferential trade agreements with Iran should have been exempt from the restrictions. “Textiles, white appliances, food, medical supplies and cosmetics are among the products we sell the most to Iran. Similar goods are being produced in Iran. Following the decision of the Iranian parliament, our exports to Iran could nearly grind to a halt,” he said.

    Yet, despite the disappointment in commerce, cooperation is strengthening in other realms, especially tourism. The Association of Turkish Travel Agencies (TURSAB) and the Association of Air Transport and Tourist Agencies of Iran signed a deal in February in a bid to increase the number of tourists between the two countries. According to TURSAB chair Firuz Baglikaya, out of 40 million tourists who visited Turkey in 2018, 2 million were Iranian.

    The 2 million figure suggests that political solidarity between the two countries is also encouraging tourism, despite the economic difficulties in Iran. Another factor encouraging Iranian tourists is the Iranian currency’s 20.9% appreciation against the Turkish lira in 2018.

    Iranian investment in real estate in Turkey is also on the rise. Last year, Iranian nationals bought 3,652 homes in Turkey, ranking second after Iraqis, who bought 8,205 homes.

    Iranian businesspeople are also increasingly attracted to Turkey. According to figures obtained from Turkey’s Union of Chambers and Commodity Exchanges, Iranians set up 1,019 companies in Turkey last year, up from 357 in 2017, ranking among the top three on the list of foreigners establishing companies in the country.

    The companies, along with the touristic exchanges and the realty purchases, serve to strengthen the bridges between the two peoples. Yet the Iranian state’s increasing introversion under the impact of moves to protect its economy is making things harder for business. No wonder Turkey’s Trade Ministry warns local entrepreneurs on its website that Iran ranked 124th among 190 countries in terms of the ease of doing business in 2017.

    https://www.al-monitor.com/pulse/originals/2019/03/turkey-iran-trade-dissapoints-big-time.html
     
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  2. KediKesenFare

    KediKesenFare SENIOR MEMBER

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    Iran banned the importation of 339 products, among them 61 products within the scope of the preferential trade agreement,” Cayabatmaz told Anatolia news agency in January, adding that the association had asked the competent Iranian authorities to lift the ban and that the issue had been discussed also between the two countries’ presidents. “Bilateral accords such as the preferential trade agreement are international agreements that cannot be repealed with decrees. We’ve communicated this to the Iranian authorities,” he said.

    As much as I respect Iran but pacta sunt servanda is an important principle of bilateral relationship in the international arena. If we can't trust your word, how can you expect us to trust your actions?

    Iran is winning in Syria but somehow losing her momentum. Very sad.
     
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  3. Tokhme khar

    Tokhme khar BANNED

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    Sounds like this wahabbi AL-Moniter from Sawdi Judea is spinning up shit........Our presidents paint a very different picture:

    http://www.xinhuanet.com/english/2018-12/20/c_137687900.htm

    We are intending to boost bilateral trade with Turkey to over $30 bln annually.

     
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  4. OldTwilight

    OldTwilight FULL MEMBER

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    what point of having trade with you while you are the only one who get the benefits !?
     
  5. KediKesenFare

    KediKesenFare SENIOR MEMBER

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    Are you sure? The trade balance is in your favour.
     
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  6. OldTwilight

    OldTwilight FULL MEMBER

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    but you don't pay us in $ or gold ... so its seems we are giving our precious good to you and in exchange we are forced to accept you useless currency or your useless junks ....
     
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  7. Timur

    Timur SENIOR MEMBER

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    http://www.hurriyetdailynews.com/irans-import-ban-to-hit-turkish-firms-140667
    Iran’s import ban to hit Turkish firms

    ....

    Turkey’s exports to Iran may decline further because of the latest decision by the Iranian parliament,” Çayabatmaz said.

    Iran mostly imports consumer goods from Turkey.

    Turkey sells textile, white goods, food, health and cosmetics products to Iran. Iranian companies also produce similar products. Thus, because of the Iranian parliament’s import decision ban, our exports to this country may even come to a halt,” Çayabatmaz warned.
     
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  8. KediKesenFare

    KediKesenFare SENIOR MEMBER

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    Frankly, I do believe that the Turkish currency is still more valuable than Iranian rial. Apart from that, why do you think we trade with you in domestic currencies? Sanctions, remember?
    You are the reason for disturbances in our trade relationship. Think about it.
     
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  9. OldTwilight

    OldTwilight FULL MEMBER

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    simply , you can pay in gold ....
     
  10. Titanium100

    Titanium100 FULL MEMBER

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    The Iranian economy can't sustain itself and the ban came due to trying to limit cash going outside and losing more foreign exchange. This means they are standing on their last legs economically
     
  11. Timur

    Timur SENIOR MEMBER

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    at least if a war with iran would happen (Saurael and minions ) than it wont hurt us much.. we should hurry building the wall
     
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  12. 925boy

    925boy FULL MEMBER

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    I am ok with your opinion but in my own opinion, Al-Monitor's articles are generally good and accurate. They might not be complete, but they are generally informational, which is helpful to me.

    I agree with your analysis, but i disagree with your conclusion. While this article correctly implies Iran is becoming more isolated (due to reduced trade with neighbors), i do not believe Iran will collapse economically. Iran has internal wealth(and we know oil wealth slows/prevents economic collapse, usually!) and isnt even under UN economic sanctions, so no, Iran wont collapse. Iran is most likely to recalibrate and readjust.

    or crypto. for real
     
  13. Mithridates

    Mithridates FULL MEMBER

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    west is pushing iran to get nukes. don't get excited if iran falls she will drag your minions down with itself.
     
  14. OCguy

    OCguy FULL MEMBER

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    Sorry, I will trust almost any source over State Iranian news meant for local consumption.

    Al-Monitor is actually considered a Pro-Assad and Lebanese newspaper.
     
  15. KediKesenFare

    KediKesenFare SENIOR MEMBER

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    I like Iran for her kind and generous people. I will always do. But we certainly don't live in a fair region; if the Middle East were a fair place to live in, Iran would have been our greatest friend, most important ally and our most important source of investment and income. They ruined their country and they ruined our lives, too.

    Look at them. They are richer than Saudi Arabia, their people are most certainly more capable than Saudis and yet, the majority of Iran looks like the worst places of SE & E Anatolia. They won't accept this statement, I know. They will show you some fancy pics from particularly chosen cities with decent town centers but that's it.

    I don't hope for a regime change, I don't wish for a war in Iran, I don't want to see changing land borders but I can't take the current situation anymore - and I'm a foreigner, a Turk who's looking from the outside. I wonder how the real Iranians feel, at night, once they're home and shielded from the regime.

    This is why I really think that something big will happen in Iran, sooner or later. Iran is the only country in the region which is losing while winning. Everything is so fragile when it comes to Iran. They invested blood and money in Syria but the Russians are trying to push them out, Iraq is strengthening her relation with Saudi Arabia, they are at odds with Pakistan, they have several separatist movements at the same time going on, the countries infrastructure is decaying. It seems like Iran is collapsing and everyone around is awaiting a big explosion but, on the contrary, Iran's decline is happening very quietly and bit by bit.

    Turkey's export is booming but read this ridiculous article to understand how messed up things are in Iran:

    Iran overtakes Turkey in goods export to Iraq
    [​IMG]
    TEHRAN, Feb. 10 (MNA) – Islamic Republic of Iran overtook neighboring Turkey in export of products to Iraq in 2018, according to secretary general of Iran-Iraq Joint Chamber of Commerce.

    Secretary General of Iran-Iraq Joint Chamber of Commerce Hamid Hosseini made the remark in an interview with IRNA on Sat. and put Turkey’s exports value of products to Iraq in 2018 at $7.35 billion.

    He also put Iran’s exports value of products to neighboring Iraq in 2018 at $8.75 billion.

    In total, Turkey exported $154 billion worth of products in 2017, $8.3 billion worth of which was exported to Iraq.

    Turkey’s export of products in 2018 reached from $154 billion to $163 billion, he said, adding, “despite Turkey’s exports growth, the country’s share of exports to Iraq declined about $1 billion.”

    The secretary general added, “statistics of Iran’s export of products to neighboring Iraq in 2018 show that the Islamic Republic exported $8.75 billion worth of products to Iraq in 2018, so that this figure excludes transit and medical tourism.”

    In this regard, Turkish share of Iraq’s service market surpasses Iran in terms of health tourism, he maintained.

    Elsewhere in his remarks, he emphasized that Iran will increase its exports to Iraq, adding, “although export of goods may face significant decline, Iran’s export of services would be accelerated.”

    Hosseini put the trade volume exchanged between Iran and Iraq in 2018 at $6.502 billion, so that Iran and Iraq accounted for $6.425 billion and $77 million respectively.

    Iran's export of products to Iraq in the nine months of current year (March 21 – Dec. 21) hit $7.322 billion, showing a significant growth as compared to the same period last year, the secretary general concluded.
    https://en.mehrnews.com/news/142363/Iran-overtakes-Turkey-in-goods-export-to-Iraq

    Iran doesn't need a change but the country definitely needs change.
     
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