Economy, Domestic Economy

Iran-Turkey Trade Ties to Overcome Challenges

Iran-Turkey Trade Ties to Overcome Challenges
Iran-Turkey Trade Ties to Overcome Challenges

Iranian-Turkish economic relations will have the lion’s share of advantages that will accompany Iran’s normalization of ties with the international community.

Trade volume between the two countries, which stood at $22 billion in 2012, dropped to $14.6 billion in 2013 and $13.7 billion in 2014 due to the impact of sanctions in recent years.

Specialists suggest that this trend of economic affairs will be reversed with the removal of sanctions and bilateral trade will easily reach $30 billion in the next few years.

Bilateral commercial relations will mainly focus on the fields of health, service industry, shopping mall management, hotel management, contracting and engineering, read an article in the Turkish newspaper Daily Sabah.

Turkish exports could rise between 8-10% with the end of sanctions on neighboring Iran following its nuclear deal with world powers, Reuters quoted the head of the Turkish Exporters’ Assembly (TIM) as saying on Wednesday.

“Key sectors for Turkish companies in Iran are automotive, clothing, textiles, machinery and chemicals,” TIM Chairman Mehmet Buyukeksi said at a news conference.

“Turkish and Iranian companies, especially those in the automotive business, could form joint ventures to enter Central Asia markets.”

Among Turkish companies interested in Iran is mobile operator Turkcell, which said this week it is looking for acquisition opportunities to expand regionally and that Iran could be a target market.

The Istanbul Chamber of Commerce (ITO) is seeking to expand Turkey and Iran’s trade ties, the chamber announced in a press statement on Monday.

“We need to bring our commerce and mutual partnerships with Iran to a new level,” Today’s Zaman quoted ITO President Ibrahim Caglar as saying.

“When looking at Turkey’s historical and economic relations with Iran, we think that Iran’s strongest business partner will be Turkey. As Istanbul merchants, our goal is to sell products to Iran and also to create production opportunities with Iranian entrepreneurs and market to third-party countries,” Caglar said.

According to ITO statistics, 1,715 firms in Istanbul are funded by Iranian capital and 240 of these were founded in 2015 alone. Wholesale and foreign trade firms were among those most commonly established.

“In May, we are organizing Expo Turkey in Iran fair and I believe that this fair will create important opportunities for our investors,” Caglar said, adding that ITO had staged a recent meeting with the Iranian Chamber of Commerce leaders and a number of businessmen.

Referring to challenges facing bilateral trade, Istanbul-based International Transporters’ Association says a boost in trade volume between Turkey and Iran is unfeasible unless problems concerning customs relations between the two countries are addressed.

UND Chairman Fatih Sener has warned that truck quotas would continue hindering increased trade relations between the two countries.

Hailing the landmark deal, Sener recalled that crippling sanctions were an obstacle before the effective working of a major tariff deduction deal signed between Turkey and Iran, which came into force in January 2015.

“The expected increase in trade volume failed to come true due to sanctions in 2015,” Sener said.

“This embargo is now being lifted. Despite this favorable development, however, transportation difficulties and waits at border gates still lack a resolution. We have been seeing reports about Turkish companies that are set for investing in and opening stores in Iran [after sanctions] … But [Turkey’s] Gurbulak border gate, which connects Iran to the world, is far from handling even the current volume of trade, as it sometimes sees 30-kilometer-long truck queues.”

Gurbulak is a village in the province of Agri in eastern Turkey. It is a border checkpoint into Iran.

“Turkey has already made the required investment for capacity increase,” Sener said, calling on Iranian officials to help Turkey on this.

According to the manager of Iran’s Bazargan Border Terminal, Jaber Akbarpour, a 24-kilometer queue is a permanent fixture at the crossing. “Every day about 340 trucks manage to cross the border checkpoint, which is to blame on lack of parking space on the Turkish side,” he said.

“To improve traffic flow on this border, a meeting will be held in the coming days between Iranian and Turkish officials. The two sides will discuss increasing workforce, working hours and expansion of parking lots.”