Economy, Domestic Economy

Ground Rules for Trade Cooperation With Italy

Ground Rules for Trade Cooperation With ItalyGround Rules for Trade Cooperation With Italy

Iran has outlined the ground rules for the new era of cooperation with Italian businesses, a deputy minister of roads and urban development said.

Asghar Fakhrieh Kashan added that Iran’s cooperation with Italian companies is subject to a few “conditions”.

The domestic businesses should have shares in joint ventures; Italians should export the jointly manufactured commodities; technologies used in design, engineering, manufacturing, management and operation should be transferred to Iran and foreign associates should entirely fund the joint projects, IRNA quoted the official as saying.

Kashan made the statements in a meeting with the head of the Italian mission, Deputy Minister for Economic Development Carlo Calenda in Tehran on Tuesday.

Last week, Calenda led a 37-member delegation of prominent Italian traders, representatives of industries and financial institutes to Iran to lay the groundwork for the resumption of economic cooperation after the lifting of western sanction against Iran.

During the two-day visit, the Italian mission, which comprised representatives of numerous Italian businesses, signed several memoranda of understanding.

The Italian business owners, according to the Iranian co-chair of Iran-Italy Chamber of Commerce, Ahmad Pourfallah, were reminded on several occasions during their visit that they should not see Iran as a consumer market for selling their products.

“They should also think of bringing their own capital to Iran,” he wrote in Financial Tribune’s sister publication Tejarat-e Farda.

The Italian deputy minister said Italy’s SACE, an export credit agency, which is technically the country’s exports and imports bank, has confirmed it will invest €5 billion to insure lines of credit immediately after the implementation of Iran’s nuclear deal to support trade transactions.

Italy used to be Iran’s top European trading partner before the sanctions were imposed. In fact, the country has deep-rooted industrial ties with Iran. In fact, Italy’s Institute for Industrial Reconstruction was used as a model for the establishment of Iran’s Industrial Development and Renovation Organization in 1967 with the objective of accelerating the country’s industrialization process and increasing Iranian exports. Therefore, experts believe that the pattern of entering into joint ventures, including small- and medium-sized enterprises, are very much alike.

Economic cooperation between Tehran and Rome followed an upward trend after the establishment of IDRO. Italians designed their downstream sectors based on Iran’s oil industries and later became one of the country’s major oil buyers.

Also, after the 1979 Islamic Revolution, both countries continued their collaborations in auto parts manufacturing, leather industry, footwear production, steel, decorative stones, tiles and ceramic production.

Italy was one of the first countries to visit Iran in the wake of the nuclear pact and calling for expansion of all-out ties with their traditional trading partner in the Middle East. However, experts believe it would take a long time for targeted joint investments to be realized.