Iran's trade with 27 members of the European Union grew by 13.68% during February to reach €421.7 million.
This is while bilateral trade during the first two months of 2021 reached €688 million to post a 7.7% decline compared with the previous year's corresponding period, when they exchanged €741 million worth of goods.
Statistics extracted from Eurostat's database show Iran exported €74.7 million worth of goods to its EU partners in February, up 17.3%. Imports from the green continent grew by 12.93% to €347 million during the second month of the year.
Germany remained the top trading partner of Iran among EU states during the period, as the two countries exchanged €271.07 million worth of goods, 6.3% less than the corresponding period of the year before.
The Netherlands came next with €101.2 million worth of trade with Iran to register a 66.3% growth in bilateral trade.
Italy with €98.6 million (down 18.3%), Spain with €53 million (up 18.11%) and France with €31.6 million (down 27.7%) were Iran's other major European trading partners.
The Czech Republic registered the highest growth in trade with Iran during the two months under review with 112.8% and was followed by
Greece with 88% and Lithuania with 80%.
Eurostat is a directorate of the European Commission located in Luxembourg. Its main responsibilities are to provide statistical information to EU institutions and promote the harmonization of statistical methods across its member states and candidates for accession.
Organizations in different countries cooperating with Eurostat are summarized under the concept of the European Statistical System.
Exports
Iran exported €119.47 million worth of commodities to the EU during the two-month period, indicating a 14.7% decline compared with the similar period of the previous year.
The main export destinations over the period were Germany (€40.5 million), Italy (€30.2 million), Spain (€14.1 million) and the Netherlands (€5.6 million).
Exports to Estonia saw the biggest year-on-year increase with 307.6%.
Top exported goods from Iran to the EU region mainly included edible fruit and nuts; fruit zest; mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes; plastics and articles thereof; pharmaceutical products; coffee, tea, mate and spices; products of animal origin, not elsewhere specified or included; iron and steel; organic chemicals; carpets and other textile floor coverings.
Imports
Iran’s imports from the EU member states declined by 5.55% to €568.52 million during January-February.
Germany accounted for the largest share of exports to Iran with €230.5 million, down 3.8%, followed by the Netherlands (€95.6 million), Italy (€68.3 million) and Spain (€39.08 million).
The imports mainly included nuclear reactors, boilers, machinery and mechanical appliances, parts thereof; pharmaceutical products; optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus, parts and accessories thereof; and cereals.
Electrical machinery and equipment; sound recorders and reproducers, television image and sound recorders and reproducers; organic chemicals; miscellaneous chemical products; oilseeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; plastics and articles thereof; essential oils and resinoids; as well as perfumery, cosmetic or toilet preparations were other commodities imported from the EU during the period.
Trade with EU member states in 2020 stood at €4.24 billion to register a 13.35% decline compared with €4.89 billion in 2019.
Iran exported €618.03 million worth of commodities to EU during the 12-month period, indicating a 7.18% fall compared with €665.8 million in 2019.
Imports from EU dropped by 14.32% to stand at €3.62 billion during 2020.
Impacts of Sanctions, Pandemic
The decline in Iran-EU trade was mainly due to the United States’ sanctions against the Islamic Republic.
The intensification of sanctions in fiscal 2011-12, on the one hand, led to a sharp decline in the export of Iranian commodities like chemicals and petrochemicals, petroleum products as well as nuts and dried fruits, and on the other, government restrictions on imports to economize on foreign currency until the fiscal 2015-16.
Amid heavy sanctions against the Islamic Republic, the government had placed an all-out ban or restrictions on imports.
“A list of banned imports, including 1,600 items, was released by the government a few years ago to economize on foreign currency reserves in the wake of the US reimposition of sanctions. The number of these items increased to 2,262 last [fiscal] year [ended March 20, 2021],” Mehrad Ebad, a member of Iran Chamber of Commerce, Industries, Mines and Agriculture, said in a write-up for the news portal of Tehran Chamber of Commerce, Industries, Mines and Agriculture.
“The ongoing restrictions or total ban on imports will continue even if sanctions against Iran are lifted. These measures are aimed at giving a boost to domestic production,” Minister of Industries, Mining and Trade Alireza Razm-Hosseini was quoted as saying by IRNA.
“The production of parts in many industries has been localized such that domestic manufacturers account for 75% of home appliances and 80% of car production.”
Iran and P5+1 signed the Joint Comprehensive Plan of Action on July 14, 2015, which culminated in the removal of international sanctions in January 2016.
Former US president, Donald Trump, announced the United States’ withdrawal from JCPOA on May 8, 2018, and reimposed sanctions on Iran’s economy.
Marjan Faqih Nassiri, the head of the Institute for Trade Studies and Research, told ILNA that the withdrawal of the United States from JCPOA in May 2018 and the intensification of restrictions, especially in the field of currency transfer, caused a severe contraction in foreign trade.
“Under the circumstances, in addition to severe restrictions on the exports of oil and petroleum products, non-oil exports also faced problems. The reduction of foreign exchange resources due to the decline in exports naturally affected the volume of imports. However, in the fiscal 2019-20, despite the 7% decline in non-oil exports, due to the necessity of meeting the needs of the country and handling the domestic market, imports increased by 1.2%,” she said.
Restrictions related to the Covid-19 pandemic have also negatively affected Iran’s foreign trade.
Referring to the impact of the Covid-19 pandemic, Nassiri said, “Fiscal 2019-20 coincided with the outbreak of coronavirus and it caused a decline in world trade. Naturally, our country was also affected by it, as sanctions and the resulting restrictions exacerbated the impact of the outbreak on our country. Restrictions and sanctions have led trade planners to focus on exports to 15 neighboring countries, as well as India and China, since then.”
Data released by the Islamic Republic of Iran Customs Administration show Iran’s neighboring countries accounted for about half of its total non-oil trade in the last Iranian year.
The pandemic led to the closure of borders and restrictions on transfer of goods and it was an effective factor in the overall decline of Iran’s foreign trade.
As indirect negotiations are underway between Iran and the US in Vienna, there is a possibility of improvement in Iran’s foreign trade.
US officials returned to Vienna this week for a fourth round of indirect talks with Iran on how to resume compliance with the deal.
“The lifting of sanctions will have a significant impact on reducing trade risks and investment development in the country, stabilizing the markets and creating positive sentiments for investment," Nassiri said.
Iranian President Hassan Rouhani said on Saturday he was optimistic over talks to revive the 2015 nuclear deal with world powers and suggested a deal had been reached to lift the main sanctions on Tehran.
“Only the details remain to be agreed. We've reached a point where the Americans and Europeans are saying openly they have no choice but to lift sanctions and return to the [nuclear deal], and that almost all main sanctions have been lifted and talks are continuing on some details," Rouhani said.
