Trade between Iran and European Union member states during the first four months of 2019 stood at €1.61 billion to register a 76.46% plunge compared with last year’s corresponding period.
Iran’s trade with Malta, Cyprus and Bulgaria increased by 130.35%, 70.3% and 24.11% respectively. These were the only EU members to experience an increase in commercial exchanges with Iran over the period, as those with the remaining 25 EU member states declined.
Trade with Greece (€14.54 million), Luxembourg (€70,927), Spain (€68.24 million), France (€122.2 million) and Italy (€264.37 million) saw the sharpest declines of 97.82%, 96.9%, 93.13%, 87.85% and 84.58% respectively.
Eurostat (European Statistical Office) 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 that cooperate with Eurostat are summarized under the concept of the European Statistical System.
Exports Nosedive 93.16%
Iran exported €259.1 million worth of commodities to the EU during the four months, indicating a 93.16% fall compared with the similar period of the previous year.
The country’s main export destinations over the period were Germany (€72.17 million), Italy (€52.94 million), Belgium (€36.55 million), Spain (€21.05 million) and Romania (€14.11 million).
Iran’s exports to Latvia, Estonia and Hungary experienced the highest year-on-year growth rates of 702.77%, 138.41% and 74.34% respectively.
This is while exports to Greece, France and Spain fell by 99.12%, 99.05% and 97.34% YOY respectively, which are the sharpest among EU member states.
The exported goods mainly included plastic and plastic products worth €64.75 million; edible fruits and nuts, zest of citrus fruit or melons worth €43.81 million; iron and steel worth €23.61 million; coffee, tea and spices worth €16.54 million; pharmaceutical products worth €13.13 million; carpet and other textile floorings worth €12.45 million; animal products worth €10.31 million; iron and steel products valued at €9.54 million; and lac, gums, resins and other vegetable saps and extracts worth €7.82 million.
Imports Fall 40.5%
Imports from the EU dropped by 55.89% to stand at €1.35 billion during the period.
The top five exporters from the European bloc to Iran were Germany with €449.5 million, Italy with €211.42 million, the Netherlands with €121.06 million, France with €115.74 million and Belgium with €69.13 million worth of shipments to Iran.
Malta with €119,421, Cyprus with €2.24 million, Bulgaria with €14.05 million were the only EU countries whose exports to Iran saw a YOY increase (13,169%, 77.48% and 36.63% respectively).
Luxembourg with €41,934, Latvia with €119,119 and Estonia with €306,266 experienced the sharpest YOY decline in exports to Iran (98.12%, 94.34% and 84.78% respectively).
Imports mainly included nuclear reactor parts, boilers, machinery and mechanical appliances and parts worth €318.66 million; pharmaceutical products worth €203.56 million; optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus worth €105.83 million; cereals worth €141.29 million; and electrical machinery and equipment, sound recorders and reproducers, television image and sound recorders and reproducers and parts and accessories thereof worth €70.14 million.
Other imported products included organic chemicals worth €47.85 million; miscellaneous chemical products worth €35.57 million; plastics and plastic articles worth €33.18 million; oilseeds and oleaginous fruits (used for extracting oil), miscellaneous grains, seeds and industrial or medical plants, straw and fodder valued at €28.25 million; essential oils and resinoids, perfumery, cosmetic and toilet preparations worth €27.4 million.
A Damp Squib
INSTEX, a plan to circumvent American sanctions on Iran and facilitate international trade with the Islamic Republic, was branded a damp squib when it became operational at the end of June.
The system, created by Germany, France and Britain, is so far limited to medicine and food, which are considered humanitarian items not subjected to US penalties.
So far, just a few million euros have been injected into the scheme—a virtual ledger for EU companies to offset balances, allowing them to exchange goods with Iran without direct transfers of money.
Most commentators think that even if the mechanism is scaled up as Brussels intends, it will fail to arrest the huge damage to Iran's economy caused by Washington's sanctions.
"At this stage, it doesn't even get close to becoming a meaningful mechanism for preserving humanitarian trade between Iran and Europe," Ali Vaez, director of Iran Project at the International Crisis Group, told DW.
Vaez said INSTEX would need to facilitate several billions of euros worth of bilateral trade to persuade Tehran to return to the terms of the 2015 nuclear deal.
Over the past 10 days, Tehran has twice increased its uranium enrichment beyond the limits agreed with world powers, and the country's leaders have demanded the EU's new barter scheme be expanded to cover crude oil trade.
While Washington would almost certainly view the idea of the EU facilitating oil trade with Iran as an unfriendly act, it appears that Brussels is listening.
On Wednesday, Nathalie Tocci, a special advisor to the EU's foreign affairs chief, Federica Mogherini, hinted that Iran's oil could be added to the trading scheme, possibly with Russia's help.
"The idea is to create a triangle between the EU, Russia—which is also one of the energy exporters to Europe—and Iran," Tocci told the TV channel Euronews, citing a proposal by the ICG think tank.
She said the plan would "allow Iran to export energy resources to Russia, which would then be processed through INSTEX, thus allowing European products to be exported to Iran."
Adding oil to INSTEX would almost certainly provoke a tough response from US President Donald Trump, who last year pulled his country out of the Iran nuclear deal. Trump has already threatened European companies found to be using the scheme with the loss of access to the US financial system. Already faced with the prospect of new tariffs on European car exports to the US, EU leaders may well blink first.
"For the Americans, adding oil [to INSTEX] would be a declaration of European independence," Andreas Schweitzer, managing director of the London-based trade consultancy Arjan Capital, told DW.
He said that Brussels, which normally bows to US pressure, would do well to "maintain European political and economic independence", but predicted that the plan would require Europe to "take the heat" from what Washington would see as a major threat to the US dollar-backed financial system.
On Thursday, the EU said it had added seven more member states to the 10 originally signed up to INSTEX and hinted that non-EU member states would also join the controversial barter scheme.
Vaez agreed that EU countries have been reluctant to inject export credit into the mechanism, so cooperation with Russia and China would be necessary to ensure the trading mechanism works.
Trade Triangle
Nothing will bolster INSTEX like oil revenues, the ICG official told DW, describing how Russia could do oil swaps with Tehran, and China could continue to import Iranian crude, which could then be used to pay for Asian and European exports to Iran.
"This might seem costly and burdensome for Europe, but it pales in comparison to the costs that another war in the Middle East will entail for Europe in refugee flows and radicalization," he said.
Vaez also observed that previous attempts by Brussels at appeasing the Trump administration have not improved trans-Atlantic ties and warned that "without some willingness to face off against the US, Europe risks losing its strategic relevance".
As INSTEX grows to include more than just food and medicine, Arjan Capital's Schweitzer, meanwhile, predicted that Europe's small- and medium-sized enterprises could be the biggest beneficiaries.
"Large companies with significant US exposure will not allow their US business to be endangered by trading with Iran," he told DW, due to the threat of sanctions.
When asked whether large companies might use intermediaries trading through INSTEX to conceal their transactions with Iran, he said, "In today's world, it's difficult to hide."
"A large-cap company will consciously decide whether they can work with Iran in a proper way, or whether it's not worth the effort. But INSTEX is such a prominent vehicle that many companies will want to avoid the limelight," Vaez concluded.
