Trade between Iran and EU member states during the first two months of 2019 stood at €757 million to register a nearly 80% plunge compared with last year’s corresponding period.
Iran’s trade with Cyprus and Slovenia increased by 9.9% and 0.8% respectively, which were the only two EU members to experience an increase in commercial exchanges with Iran over the period.
Iran's trade with the remaining 26 EU member states declined.
Trade with Greece (€7.96 million), Luxembourg (€66,413), Spain (€32.61 million), France (€52.51 million) and Poland (€10.03 million) saw the sharpest declines of 97.9%, 96.9%, 92.9%, 92.1% and 87% respectively.
93% Plunge in Iranian Exports
Iran exported €136.12 million worth of commodities to the EU during the two-month period, indicating a 93.7% fall compared with the similar period of the previous year, Eurostat data gathered by the Financial Tribune show.
The country’s main export destinations over the period were Germany (€37.67 million), Italy (€27.21 million), Belgium (€23.69 million), Spain (€10.15 million) and Bulgaria (€5.89 million).
Iran’s exports to Latvia, Hungary and Estonia experienced the highest year-on-year growth rates of 495.6%, 187.3% and 109.9% respectively.
This is while exports to France and Greece each fell by 99.2% and those to the Netherlands and Spain experienced a 97.3% and 97.2% YOY decline respectively, which are the sharpest among EU member states.
The exported goods mainly included plastic and plastic products worth €33.5 million; edible fruits and nuts, zest of citrus fruit or melons worth €21.5 million; iron and steel worth €13.49 million; coffee, tea and spices worth €10.55 million; carpet and other textile floorings worth €8.16 million; pharmaceutical products worth €6.19 million; products of animal origin worth €5.27 million; lac, gums, resins and other vegetable saps and extracts worth €4.47 million; and iron and steel products valued at €3.87 million.
Imports Plummet 60%
Imports from the EU plummeted by 60.3% to stand at more than €621 million during the two months.
The top five exporters from the European bloc to Iran were Germany with €222.62 million, Italy with €96.76 million, the Netherlands with €58.69 million, France with €48.58 million and Belgium with €24.54 million worth of shipments to Iran.
Slovenia with €9.12 million, Cyprus with €860,091 and Greece with €4.81 million were the only EU countries whose exports to Iran saw a YOY increase (17.5%, 16.95% and 8.75% respectively).
Luxembourg with €41,934, Latvia with €58,633 and Slovakia with €210,945 experienced the sharpest YOY decline in exports to Iran (98%, 94.8% and 91.5% respectively).
The imports mainly included nuclear reactors, boilers, machinery and mechanical appliances and parts worth €165.23 million; pharmaceutical products worth €111.27 million; optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus worth €61.22 million; and electrical machinery and equipment, sound recorders and reproducers, television image and sound recorders and reproducers and parts and accessories thereof worth €28.19 million.
Other imported products included cereals worth €25.11 million; organic chemicals worth €19.41 million; miscellaneous chemical products worth €17.7 million; plastics and plastic articles worth €17.03 million; essential oils and resinoids, perfumery, cosmetic or toilet preparations worth €16.23 million; and paper and paperboard and articles of paper pulp valued at €11.8 million.
November U-Turn
The decline in Iran-EU trade started as of November 2018 when commercial exchanges fell 66% YOY to stand at €679.55 million. Iran’s exports hit €209.98 million in that month to register a 78.12% plunge, while imports fell by 54.86% to €469.56 million.
In fact, the United States began to impose the second tranche of sanctions described as "toughest sanctions ever" against the Islamic Republic in November after the first round was reimposed in August, which impeded Iran's trade with major countries.
The sanctions were implemented after US President Donald Trump announced in May his country's unilateral withdrawal from the nuclear deal it signed together with five other world powers, namely the UK, Germany, France, China and Russia.
The deal, better known as the Joint Comprehensive Plan of Action, was signed in 2015 and implemented a year later. It saw the removal of years of international sanctions against Iran limiting the scope of its nuclear program.
More than €18.39 billion worth of commodities were traded between Iran and the European Union member states in 2018, registering a 12.2% decline compared with the value of commercial exchanges in the previous year. The balance of trade tilted toward Iran, as it registered a surplus of €550 million with EU states last year, indicating significant improvement compared to the €704.06 million deficit in 2017.
Iran-EU trade stood at more than €20.95 billion in 2017, indicating a 52.41% increase compared with 2016 figures.
Efforts to Counter US Sanctions
France, Germany and Britain have opened a new channel for non-dollar trade with Iran, dubbed Instrument in Support of Trade Exchanges (INSTEX) to avert US sanctions, although diplomats say it is unlikely to allow major transactions that Tehran says it needs to keep the nuclear deal afloat.
INSTEX is headquartered in Paris with a German chief executive officer. Germany, France and the UK will be shareholders.
The mechanism “will allow for legitimate trade to continue as foreseen in the nuclear agreement”, EU Foreign Policy Chief Federica Mogherini has been quoted as saying.
A similar company was officially registered in Iran late last month to join hands with the European trade mechanism.
The so-called Special Trade and Finance Institute was officially registered as a private company based in Tehran. It is the equivalent entity of INSTEX.
The company provides payment settlement services to legal and natural importers/exporters as well as domestic and foreign banks. It will seek to build relations with its European counterpart and monetary channels in other countries.
Patience Wearing Thin
Despite the establishment of a trade mechanism, Iranian officials say it is far from sufficient in fulfilling the commitments of JCPOA signatories to withstand US sanctions.
President Hassan Rouhani said on Wednesday Iran will give the states parties to the nuclear deal 60 days to remedy their breaches and restore Iran's interests stipulated in the international deal, IRNA reported.
The European signatories to JCPOA were doing well in lip service, but practically they were unable to implement what they promised, Iran's President Hassan Rouhani said on the first anniversary of the US withdrawal from the deal.
"Based on a decision made by Iran's Supreme National Security Council, I sent messages to the remaining five countries in the nuclear deal, announcing that we gave them one year as they requested us," Rouhani said.
"It was a strategic patience on our part,” he said, clarifying that Iran “is not leaving the nuclear deal today".
"It is not the end of JCPOA, rather it is a new phase of the deal in the context and in line with the wording of the JCPOA."
