French companies fear losing Iran trade

France’s main business lobby group, Medef, is visiting Iran today with a delegation of ministers and about 150 companies

French companies are warning that their government’s tough stance in the Iranian nuclear negotiations could be hurting their chances of winning business when sanctions are lifted.

France’s main business lobby group, Medef, is in Iran today with a delegation of ministers and about 150 companies, including Total and PSA Peugeot Citroen, to improve relations.

“[The] very tough stance has created some aggressive thinking vis-a-vis France and everything that represents France, like our company,” said Carlos Tavares, the chief executive of PSA, which is planning an assertive re-entry into the country.

France was the most demanding world power in talks ahead of a deal struck earlier this year to curb Iran’s nuclear programme in exchange for far-reaching sanctions relief, which is set to start in early 2016.

Laurent Fabius, the French foreign minister, had said in July that his country’s hawkish posture would not hurt local companies attempting to tap into the $400 billion (Dh1.5 trillion) economy, the region’s second-largest after Saudi Arabia.

But ahead of the delegation, French business leaders have warned that France risks losing out.

“We have fallen behind, so now we have to make up lost ground,” said Thibault de Silguy, the vice-president of Medef leading the delegation, citing Germany, Austria, China and the US as countries that are in front.

“This visit is very important for us,” he said, speaking to journalists before the trip. “There will need to be offers that have a strong local dimension and are competitive in pricing.”

Tavares said: “The Americans are at the doorstep, the Germans are at the doorstep, the Chinese are there, the Koreans are there . . . everybody is of course looking at the cake.”

One of the biggest Iranian prizes is its energy resources, referred to as a “candy store” of assets by one senior executive, which are likely to come up for grabs as sanctions begin to lift.

Iranian officials have held discussions with groups including Royal Dutch Shell, Eni of Italy and France’s Total. Negotiations with US energy groups — absent since the 1979 Islamic revolution — are likely to take longer.

France’s tough negotiating has helped it to win orders for its Rafale fighter plane from Egypt and Qatar, its first foreign orders for the 27-year-old jet. France is also in discussions to sell 60 Rafales to the UAE.

Peugeot is also suffering over its abrupt departure from the country in 2012 as sanctions hit home.

Fabius said after visiting Iran in July that rival carmaker Renault could find it easier to break into the market than Peugeot, given the residual anger.

By Gulf News