Domestic Economy

German Firms Preparing for Normalcy in Trade

German Firms Preparing  for Normalcy in Trade German Firms Preparing  for Normalcy in Trade

A two-day technology conference 'German Technology meets Iranian Textile and Carpet' organized by the German Engineering Association (VDMA) and co-organized by German–Iranian Chamber of Industry and Commerce (AHK) opened in Tehran on Tuesday.

The conference brings together Iranian and German experts and decision-makers from the textile and carpet-related industries through Business-to-business (B2B) meetings. Experts from 35 well-known German textile companies will present practice-oriented technology topics along the entire textile chain, according to the chairperson of VDMA Textile Machinery Association, Regina Bruckner.

"German Technology still has an excellent reputation in Iran. In 2014, Germany exported textile machinery to Iran worth 37 million euros. These figures as well as the active participation of 35 VDMA-member companies show that our industry is successfully reviving the business relations with Iran," said Bruckner in the interview published in the conference website.

"Due to the sanctions against Iran, it is still difficult but not impossible to make business within the legal framework. The conference is a clear sign towards the Iranian textile and carpet industry that our industry is interested in further cooperation even in this economically difficult situation in Iran," she went on to say.

> German Exports Set to Double

Bruckner's comments regarding German interest in boosting cooperation with Iran were not the first of such remarks this week.  Germany's business community has been hoping to substantially increase trade with Iran following the framework nuclear agreement between Iran and the six world powers in the Swiss city of Lausanne on April 2.

The Association of German Chambers of Industry and Commerce (DIHK) – the umbrella organization of the 80 regional Chambers of Industry and Commerce (IHKs) in Germany – on Sunday anticipated that Germany's exports to Iran will double over the next five years in view of the Lausanne deal, IRNA reported.

Meanwhile, the German Engineering Association (VDMA), which is the largest association representing the capital goods industry in Europe, welcomed the Lausanne deal, saying the outcome has been better than initially expected.

Expecting a rise in Iran's demand for German industrial machinery following the framework agreement, the VDMA has urged German banks to ease their restrictive monetary policies against Iran.

"We call on all German financial institutions to revise their policies regarding doing business with Iran," said the head of VDMA's foreign trade office, Ulrich Ackermann.

"This has to be done now and not in late summer because our clients cannot wait

that long," he added.

Germany's exports to Iran increased by 30 percent to reach 2.4 billion euros during the past Iranian calendar year (ended March 20) as a result of partial lifting of sanctions which followed the interim deal reached between Iran and the P5+1 (the five permanent members of UN Security Council plus Germany) in Geneva in 2013.

> Foreign Trade Statistics

A look at Iran’s foreign trade data released by Iran’s Customs Administration (ICA) over the past three years supports the growth in Germany's exports over the period.

According to ICA statistics, in 2012, Iran recorded its highest trade deficit ($6.4 billion) with the UAE, followed by South Korea with $3.9 billion, Switzerland with $3.4 billion, Turkey with $3.07 billion and China with $2.6 billion.

The foreign trade status in 2013 remained pretty much the same. However, important change took place in Iran’s foreign trade in 2014 when Germany began to beef up its volume of exports to Iran and occupied the position that was previously filled by Turkey. Iran recorded a trade deficit of approximately $1.9 billion with Germany in 2014.