The free trade zone project between Turkey and Iran is advancing as Iran seeks to reconfigure its relations with western countries. The project of establishing a free trade zone on the Turkish-Iranian border was one of the decisions made during Turkish President Recep Tayyip Erdogan’s official visit to Iran in April. The free trade zone will be located in the eastern Turkish city of Van and Khoy in northwestern Iran. Realization of the goal, however, has been a complicated process, as the laws of the two countries differ in terms of border regulations. As the first phase of the project, the two sides are currently focused on working out the differences in order to make the border relations more compatible for transactions, wrote the Turkish newspaper Daily Sabah.
Aegean-Iran Cooperation Association President, Hossein Arian, said Iran prioritizes developing trade with Turkey, because Ankara never turned its back on Iran while the western embargo was in effect. Arian added that they have been preparing for expanded trade relations for roughly seven years, as they were optimistic a nuclear deal would eventually be forged. Noting that the land border between Turkey and Iran is a great advantage, Arian said coordinating logistics and organizing trade fairs are regarded as two of the most important actions, while suggesting both countries could benefit from arranging multinational business programs.
Eastern Anatolian Exporters Association (DAİB) President, Cemal Şengel, stressed that the removal of sanctions will not only benefit Iran but also contribute to global trade. Şengel said DAİB targeted $10 billion in exports, adding that 120 business meetings took place in Iran with more than 50 resulting in an agreement. Şengel then called on the government, exporters associations and other relevant institutions to act in harmony to achieve the objectives regarding trade with Iran. He added that Iran’s and Turkey’s needs are complementary.
On the other hand, Van Chamber of Commerce President, Necdet Takva, underlined the importance of activating the land border between Turkey and Iran, stressing that the insecurity along the southern border is unsettling and needs to come to an end. Takva claimed violence and terror in the southeastern regions of Turkey is delaying the progress of trade relations, while western countries are proceeding rapidly. Beseeching government officials to create a strategy to access Iranian markets, Takva emphasized that 300 kilometers of the 580-kilometer-long Iranian border is in the eastern province of Van and it is largely underutilized. The Kapıküy-Razi border crossing is active for five hours a day, while infrastructure problems limit transit movement. Takva called for the improvement of the region’s underdeveloped infrastructure, stressing its importance in pursuit of reaching trade goals. Underscoring that they have worked hard to develop relations with Iran, Takva said both Turkish and Iranian firms want to connect with businesses across the border via their chambers of commerce.
The sanctions levied against Iran were aggravated in 2012 when the country was ousted from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the Belgium-based institution that proxies international banking transactions. The move led Iranian banks to suffer from problems with international money transfers, which made conducting business more difficult. However, this problem will come to an end within two months, as Iranian banks will once again be linked to international banks following the recent nuclear deal between Iran and the P5+1. Some Turkish banks are considering opening branches in Iran, while Iran’s Bank Mellat will increase its Turkish activities.
