South Korea will restart business cooperation talks with Iran after a 10-year hiatus to help its local companies make inroads into the oil-rich country recently freed from international sanctions, a statement by the Korean Ministry of Trade, Industry and Energy said on Thursday.
Government officials from both sides will attend the 11th meeting of their joint economic commission in Tehran on February 28-29, the Korea Times reported.
A visiting Korean economic delegation, led by Industry Minister Joo Hyung-hwan, will discuss forging new business ties in six fields ranging from finance to trade, energy, construction, healthcare and culture during the two-day meeting.
Last month, Seoul joined the United States, Europe and other nations in lifting sanctions on Iran following the announcement by international inspectors that Tehran had complied with the terms of last July’s landmark deal to scale down its nuclear program.
“Through the talks, we are looking to restore business channels that have been suspended with Iran and build the necessary framework that can help local companies win business deals in the long term,” said Kim Sang-tae, director of the ministry’s Middle East, African Trade Division.
“The government will do all it can to help businesses enter the oil-rich country and do business.”
The trade ministry expects a couple of memoranda of understanding to be signed during the upcoming meetings of Iran-Korea Economic Commission.
“We are planning to sign an initial agreement with Iran to establish an electronic trade system for government use. The solutions will help Iran rebuild its ruined trade networks with its trading partners,” the official said.
There will be announcements of other business agreements with Iran on March 2, he said without further elaborations.
The Korean ministry, meanwhile, said that on top of the planned inter-governmental meeting, Seoul plans to send a 95-member team composed of public officials and business leaders. This trip can help local officials and businesses create ties with Iranian businesses.
Kazem Soltan-Ahmadi, Iran’s political attache to South Korea, said on Wednesday that a 300-strong delegation of officials and traders of the Asian country will participate in the sessions of the two countries’ economic commission.
“As we speak, two expert teams representing the Korea Eximbank (KEXIM) and Korea Trade Insurance Corporation (K-sure) are in Tehran to negotiate the draft of credit agreements. Eximbank intends to open an €8-million credit line while K-sure plans to open a €5-million credit line,” he added.
Also, notable Korean organizations including Korea International Trade Association and the Korea Trade-Investment Promotion Agency (KOTRA) have signaled their readiness to attend the meetings.
Meanwhile, Korean President Park Geun-hye is planning the country’s first-ever state visit in the near future, Korea Herald quoted the Iranian diplomat as saying.
According to Korea’s Ministry of Foreign Affairs, Korean companies can benefit from lucrative opportunities in petroleum and natural gas, petrochemicals, shipping, shipbuilding, port construction, automobile production and precious metals.
Before the sanctions, some 2,500 Korean companies engaged in business with Iran and they were hit hard, with $17 billion in bilateral trade reduced by two-thirds.
“A Middle East powerhouse with 80 million people and a large territory endowed with rich natural resources—natural gas, oil and various minerals—Iran has large development potential in oil and gas, hydropower, highways and roads, communications networks, automobile production, electronic goods, cosmetics and healthcare,” according to Korean Ambassador to Iran Kim Seung-ho.
“That Koreans are hardworking and trustworthy is already well-known in Iran,” he said, advising potential investors to establish stable and sustainable commercial partnerships by setting up production lines in Iran, use Iranian subcomponents in production, transfer their knowledge and technology, set up joint ventures for third markets and supply capital in construction projects.
To reap maximum benefits there, Kim said, firms should move beyond traditional sectors of petroleum, natural gas, petrochemicals, steel and construction, and enter the services industry, which makes up half of Iran’s gross domestic product.
Tehran and Seoul established diplomatic relations in 1962 and over the years, they have developed “a relatively friendly and strong relationship”, according to Iranian Ambassador to South Korea Hassan Taherian who cited Tehran Street in Seoul and Seoul Street in Tehran as evidence.
Seoul has expressed commitment to support companies entering Iran as part of its key economic diplomacy. In late January, the second taskforce meeting involving various ministries was held in Seoul to discuss strengthening high-level visits, Iran’s relations with neighboring states, monetary issues in trade and investment, financial support for Korean companies, potential infrastructure projects and enhancing collaboration in shipping and healthcare.
South Korea’s Health Minister Chung Chin-youb indicated in a speech that 20,000 Korean workers had participated in construction projects in Iran in the 1970s, laying a firm foundation for bilateral ties.
Youb added that an agreement on a memorandum of understanding was nearing completion to start constructing a general hospital at Tehran University of Medical Science and to transfer South Korea’s expertise.
