Strengthening Iran-Turkey ties concurrent with US sanctions

IRNA – Iran and Turkey, in the current situation, have good capacities to increase trade volumes, and the US aggressive discourse and unilateralism on the international scene have exponentially linked the interests of the two countries.

Tehran and Ankara are planning, in the current context, to develop trade and economic relations in order to expand trade between the two sides, and efforts to create a better atmosphere with the goal of safeguarding national interests is also one of the most important policies of the two countries.

Despite the disagreement on Syria, on economic and security cooperation, Iran and Turkey have been aligned with each other, and the ties between two countries are increasingly approaching the economic front in the shadow of the US sanctions, and the two countries can complement each other via synergy and effective contribution in the line with development and prosperity of bilateral and regional economies.

Iran and Turkey are taking coordinated steps in dealing with the sanctions and unilateralism of the President of the United States, although it should be noted that the two countries are subject to the US economic sanctions and seek to implement a specific financial mechanism to remove dollars from exchanges and the launch of this foreign trade mechanism between the two countries, similar to INSTEX, for exchanges between them, regardless of the sanctions, in a standardized space could help develop cooperation between Tehran and Ankara.

The Justice and Development government and the Turkish Prime Minister Recep Tayyip Erdogan have repeatedly announced that it will adhere to the oil and gas agreements with Iran, which will not impose these sanctions, and on the other hand, it seems that the unity of countries that are being sanctioned by the US like Iran, Turkey and Russia, can make a new order in the turbulent of Middle East.

Sharif Dilek, an economy analyst at the Economic and Social Research Foundation (SITA), also believes that Ankara will have to create alternative mechanisms to maintain economic ties with Iran and Turkish companies to invest in this country.

Turkish Trade Minister Ruhsar Pekcan stated that ‘we are living in the Middle East and neighboring Iran, Syria and Iraq, and that’s why we need to continue bilateral and multilateral trade cooperation.”

He added that Turkey will continue its business with Iran, regardless of the unilateral US sanctions.

Abdul Nasser Hemmati, the head of the Central Bank of the Islamic Republic of Iran, also wrote last month, after meeting with the Turkish ambassador in his Instagram, that during a meeting with the Turkish ambassador, he pointed to the dissatisfaction of Iranian banks and the need to facilitate bilateral banking relations based on the agreement reached between the two countries’ presidents.

He highlighted that Iran and Turkey have a target of $30 billion in their business, which requires the facilitation of banking operations and financial and monetary relations between the two countries.

Iran and Turkey are now taking steps to bring economic and political convergence closer in face of the United States’ economic war.

The two countries are planning to implement a specific financial mechanism. The launch of this foreign trade mechanism between the two countries, similar to Instrument in Support of Trade Exchanges (INSTEX), for exchanges between them, can help develop cooperation between Tehran and Ankara, regardless of the sanctions issue in a standardized space.

Iran and Turkey, with a goal of hitting $30 billion in economic relations, have widespread trade relations which makes the materialization of the goal quite affordable given the oil and gas transactions between two states.

Although the volume of economic relations between the two countries is now much lower than the expected figure, the two sides are determined to develop relations and achieve this goal.

The Iranian foreign minister, in an interview with journalists in Turkey, announced the agreement on banking cooperation and the establishment of a mechanism similar to that of INSTEX in bilateral relations with the country’s officials.

‘The Turkish Foreign Minister was supposed to pursue these issues specifically, of course the officials of the joint commission will continue to do their part,’ Zarif said.

The foreign minister underlined that Turkey is keen on serious regional and international economic, political, security cooperation with the Islamic Republic of Iran.

The Iranian foreign minister expressed his satisfaction with having similar relationships with other neighbors, including Azerbaijan, Iraq, Afghanistan, Pakistan and other neighbors with whom Iran has very privileged relationships.

Turkey’s foreign minister also said at a joint meeting with his Iranian counterpart, Mohammad Javad Zarif, that his country is pursuing a new trading mechanism such as INSTEX with Iran to counter the US sanctions.

Mevlüt Çavuşoğlu emphasized Turkey’s opposition to the US sanctions, saying that Ankara and Iran needed to continue to increase bilateral trade with a target of $30 billion, three times more the volume of their current trade.

Turkish Foreign Minister added that given the current mechanisms, Ankara is examining the creation of new mechanisms, such as INSTEX, and the removal of future trade barriers.

France, Germany and Britain have recently launched a trading mechanism called INSTEX, according to which trade between Iran and the European countries will continue without using the US dollar.

Considering the good capacities that exist between Iran and Turkey, the level of cooperation is expected to increase, and the two countries’ economic activists are working to invest and engage in joint production as well as exporting to the regional countries.