Domestic Economy

Ireland Mulls Reopening Tehran Embassy to Penetrate Regional Market

Ireland Mulls Reopening Tehran  Embassy to Penetrate Regional MarketIreland Mulls Reopening Tehran  Embassy to Penetrate Regional Market

The reopening of the Irish Embassy in Iran would be a “game changer” in the post-Brexit climate and open up access for Ireland to a market of a quarter of a billion people, Ireland’s Agriculture Minister Michael Creed was quoted by the  country’s national newspaper Irish Examiner as saying.

Creed is targeting new markets for Ireland’s food and farming sectors in the wake of the Brexit result.

The UK voted on June 23 to gauge support for the country’s continued membership in the European Union. The referendum resulted in an overall vote to leave the EU, by 51.9%.

Ireland’s Department of Agriculture has set up a special committee to examine problems when the UK triggers its exit. Diversifying buyers of Irish produce will help protect against any shocks, Creed said.

“For the artisan producer, the UK is very important. [With the] growing middle classes in Southeast Asia in particular, where there’s a westernization of diet, is offering a significant opportunity.”

The minister is hopeful Ireland will reopen its embassy in Iran.

 “I know it is something that is being considered. But it’s not just a market of 80 million people in Iran; it’s actually a corridor to a quarter of a billion people.”

The embassy in Tehran was closed in 2012, but consideration is now being given to reopening it. Creed says there will be huge opportunities for trading sheep meat, given the large Muslim population.

“I think the embassy would be a game changer,” he said.

The idea of the reopening of the Irish embassy in Iran was first floated by Irish Foreign Minister Charlie Flanagan.

 “Ireland’s diplomatic network is subject to ongoing review to ensure that our resources are aligned with the greatest needs and opportunities,” Flanagan said in May. “In this context, I am very conscious of the political, economic and trade factors in favor of opening of a resident diplomatic mission in Iran with the primary aim of assisting Irish companies who wish to avail of the new trade opportunities now opening up there.”

  Trade Barriers With UK

The Irish Central Bank has reduced its forecasts for economic growth in response to the UK’s Brexit vote, predicting a “negative and material” impact “both in the short-run and the longer-term”, The Financial Times reported.

Under the bank’s worst scenario, in which the two countries face increased tariff and non-tariff barriers to trade, the bank estimates that Irish GDP could be more than 3% lower after ten years than it would have been without Brexit.

The CBI said reduced foreign demand is likely to hit trade, employment and foreign investment, while uncertainty could also weigh on domestic consumer and investor confidence.

The bank added that things may turn out worse than they have predicted.

“The risks to the projections are firmly weighted to the downside following the Brexit vote. These reflect both the possibility of a larger than anticipated direct impact on the UK economy and a larger spillover to other trading partners, particularly the euro area. In the domestic economy, the potential exists for negative impacts on consumer and investor sentiment and for a more adverse labor market.

The surprise result of the referendum left Ireland with its biggest political and foreign policy crisis for generations, with security and border issues compounding worries over the two countries’ strong economic ties.

The Irish economy has become less reliant on the UK for trade in recent years, but it is still the country’s largest trade partner, and is particularly important for sectors such as agri-food and tourism.

  Irish Trade Mission in Iran

At the end of April, Ireland’s state agency Bord Bia embarked on a trade mission with 17 Irish food producers to explore the potential of the Iran market.

Bord Bia is Ireland’s trade development body promoting the sale of Irish food and horticulture products abroad

The visit was aimed at increasing Ireland’s share in the Iranian food market following the removal of international sanctions in January.

The Irish delegates, including Michael Creed, met senior officials of the Agriculture Ministry to discuss trade opportunities for Irish beef, sheep meat and dairy in particular

“Iran’s profile as a key player in the region will make it a key focus for any nation with agro export-related ambitions such as Ireland and could be considered a gateway to the region,” Creed said after the visit.

“Ireland has an ambitious strategy for the growth of its agri-food sector up to the year 2025 and deeper engagement with export markets such as Iran are a key feature of this plan.

“Given demographic trends in Iran, coupled with previous trade patterns, it could be expected that beef, sheep meat and dairy/infant formula products represent key opportunities. These were also the products which Ireland once exported in large volumes to Iran and so the trading relationship between both countries is already well established,” he added.

Aidan Cotter, the CEO of Bord Bia had this to say upon returning from the Iran visit: “ With a well-educated population of 80 million people, some 40% of whom are under 25 and an economy anticipated to expand by over 2% annually over the coming years, the lifting of sanctions will offer new trading opportunities in Iran for Irish food exporters to increase their share of the market.”

“The Iranian food industry showed a deep interest in the full range of the Irish dairy offering and while the lifting of sanctions has not yet removed all obstacles to trade, the frank and informative presentation by Iranian legal and financial experts as well as the high level of engagement between exporters and buyers ensures that business opportunities will multiply as the economy grows, and sanctions recede,” he added.

Ireland’s food and beverage exports to Iran in 2015 amounted to €3.6 million consisting mainly of juices, butter and prepared foods, according to Bord Bia.

According to the Islamic Republic of Iran Customs Administration’s latest data, Iran imported more than 11,300 tons of non-oil goods, worth $35.8 million from Ireland during the first four months of the current Iranian fiscal year (March 20-July 21), which indicates a 2% decrease compared to last year’s corresponding period. The imported goods mainly included pharmaceuticals, medical equipment, corn fodder and computer parts. Iran’s exports to the European country are negligible.