Domestic Economy

UK Fence-Mending in Tehran

UK Fence-Mending in TehranUK Fence-Mending in Tehran

In Iran’s new economic era, the private sector will play a bigger role and cooperation with powerful countries will be of high priority, but it is difficult to work with the UK, in view of its approach during the sanctions regime.

The statement was made by the head of Iran Chamber of Commerce, Industries, Mines and Agriculture, Mohsen Jalalpour, in his Saturday meeting with British Minister of State for Trade and Investment Francis Anthony Aylmer Maude and representatives of 12 British energy, infrastructure, oil and gas giants, Donya-e-Eqtesad daily reported.

Noting that “it takes time to forget about the unfair treatment of the UK in the past”, Jalalpour put forward three suggestions for the European country to start economic interaction with Iran.

“British banks need to shift their attention to Iran since companies would initiate a move based on banks’ predictions. Also, all British economic players and those eager to engage with Iran need to draft bylaws on the end of Iran’s sanctions. This move could ease tension between us,” he said.

Jalalpour also called for joint, long-term investment with the British side.

“All countries willing to join hands with Iran need to see Iran as a regional hub for expansion of cooperation and not a consumer market. With the government’s go-ahead, the potential of Iran’s private sector needs to be tapped in regional joint projects,” the ICCIMA chief added.

The British minister said his country is keen to reestablish ties once sanctions are lifted, but Iran should assure British companies that their investments are secure in the long run.

“The companies accompanying me on this trip, such as Royal Dutch Shell and BP, seek long-term presence in Iran’s energy and industrial markets. None of them cooperates on a short-term basis and they look for long-term partnership with their Iranian counterparts as well,” Maude said.

Jalalpour noted that besides oil, gas, energy, industry and agriculture, fields such as environment, desalination, water treatment and wastewater projects would offer potential for cooperation between the two countries.

In a separate meeting with Iran’s Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh, Maude expressed Britain’s willingness to broaden ties with Iran and said the two countries share a long history of ties. He added that Britain is ready to cooperate in sectors of oil and gas, air and rail transport as well as engineering.

Nematzadeh said Iran is willing to expand cooperation with the UK in the fields of new technologies, public transportation, oil, gas, petrochemicals, medical equipment and textile.

“Britain’s experience in financial and legal services would be a sound basis for fostering bilateral collaboration,” he added.

The Iranian minister also called for the support of European countries in improving Iran’s infrastructure and paving the way for the country’s membership in the World Trade Organization.

Diplomatic relations between Tehran and London were strained in November 2011 when Iran announced it was expelling the British ambassador in response to London’s support for tougher sanctions against Tehran over its nuclear program. The UK responded by closing the Iranian Embassy in London later that month.

But the two countries wasted no time in restoring diplomatic ties, as Britain reopened its embassy in Tehran a month after the landmark July 14 nuclear agreement.

In early October, the 30-member trade and investment delegation headed by director general of British-Iranian Chamber of Commerce, Martin Johnson, accompanied by former British ambassador to Iran, Richard Dalton, visited Iran. Their four-day visit was the first by a UK delegation to prepare the ground for economic cooperation with Tehran in over a decade.

Britain’s strong backing of sanctions against Iran resulted in losing 84% of its exports to Iran. Previously, the UK had between £400-500 million ($600-700 million) in direct exports and about as much in indirect exports.

Iran imported $614 million worth of goods from Britain during the past Iranian year (ended March 20), while it exported commodities worth $72 million, according to data provided by Iran’s Customs Administration. Iran’s imports from the UK included medicine, medical equipment and grains, while exports included steel and iron products, hand-woven carpet, saffron, dates and raisins.

Iran’s exports to and imports from the UK stood at $17 million and $190 million respectively in the first half of the current Iranian year (started March 21).