Banking Problems Are the Major Obstacle of Iran-EU Trade

Sunday, November 12, 2017 - 10:25

A strong European Union delegation comprising Europe’s senior officials and economic activists headed by Phil Hogan, the European commissioner for agriculture and rural development, met Iranian officials to discuss different issues including expansion of economic relations, the official website of Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA) quoted Kaveh Zargaran, the chairman of TCCIMA’s committee for agriculture, water and food industries.

According to an ISCA report, Deputy Minister of Agriculture Ali Akbar Mehrfard has stated that unfortunately the banking problems between Iran and the Europe still have not been remained even after lifting of Iran's economic sanctions which causes many challenges for exporters.

In the joint meeting of economic activists from Iran and the European Union, Mehrfard explained that the meeting reflected both sides’ determination in developing cooperation. He added that Iran is a unique country in agriculture and the food sector, “ over 2200 species of herbs, any plant with leaves, seeds, or flowers used for flavoring, food, medicine, or perfume, have been identified in Iran and over 60 types of fruits are place in Iran's commercial cycle.”

Iranian Deputy Minister of Agriculture also continued that banking problems between Iran and the Europe have to be solved as well as standards must be paid attention more, “EU tariffs must be considered and reduced in order to provide the possibility of competition in the market.”

The head of Tehran Chamber of Commerce Masoud Khansari stated that more than 200 Business and Economic board, mostly from Europe, have been traveled to Iran after its nuclear deal. He added that, “EU is the second major destination for exports of Iranian products, accounting for 13 percent of Iran’s annual foreign trade.”

Referring to the 60-percent rise in the two-way trade after the implementation of Iran’s nuclear deal – officially known as the JCPOA - in January 2016, he regretted that banking impediments still hinder the growth of trade with EU.

Khansari also referred to the ample investment opportunities in various sectors of the Iranian economy, saying that “regarding Iran’s population of 80 million people and access to a regional 400-million-market, European investors can benefit from boosting cooperation, particularly in food industry, with Iranian firms.”

“The Iranian food industry has witnessed an acceptable growth and food products have presently a big stake in Iran’s non-oil exports,” he said, “By expanding their ties with Iranian companies, European investors active in this sector will have the chance to find their way to other markets in the region.”

Kaveh Zargaran, the chairman of TCCIMA’s committee for agriculture, water and food industries, stated talks with the EU Agriculture and Rural Development Commission started around 8 months ago and preliminary agreements have been reached.

“Over the next two days, contracts are expected to be signed between Iranian and European sides,” he was quoted as saying at a joint business forum in Tehran Chamber of Commerce, Industries, Mines, and Agriculture.

Zargaran noted that trade of foodstuff and beverages between Iran and the EU decreased by 18% during the seven months to October 22. The official believes that the lack of banking and financial interactions imposes heavy expenses on Iranian businesspeople when dealing with the Europeans.

Currently, there are obstacles in the way of export of agricultural products to Europe, which can be removed through establishment of the European Union office in Tehran. Iran is one of the world’s leading exporters of agricultural products, namely pistachios, nuts and saffron to the world.

Following the implementation of the 2015 nuclear agreement between Iran and world powers in 2016, the European countries have increased their economic and political relations with Tehran. Several giant European companies, including Total, Siemens, Renault and Eni have returned to Iran to resume their economic relations.

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