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Rouhani in Europe: Economic Cooperation on the Negotiating Table

Wednesday, January 27, 2016

IRNA Research and News Analysis Group

The ongoing visits by Iran's President Hassan Rouhani to France and Italy, as two big European powers, can be considered as an important development in Iran's relations with the European Union and the beginning of a new era in the two sides’ relations. Rouhani was originally supposed to visit these two countries as well as the Vatican in November 2015, but due to terrorist attacks in Paris, the visits were postponed.

Although the existence of differences between Iran and Europe cannot be ignored or downplayed, frequent meetings between senior officials from Iran and Europe show that the two sides’ move toward resolution of differences and reduction of tensions is steadily going forward.

During past years, the European Union has been the most important trade partner of Iran and its standing as well as power in other global arenas have been gradually increased as well. However, since a few years ago and with the escalation of differences between the two sides over Iran's nuclear program followed by intensification of sanctions against Iran, Tehran’s relations with Europe were downgraded and this downward trend in bilateral trade and economic relations continued up to the election of Iran's new president in 2013. Following the election of President Rouhani and adoption of a moderate and interactive approach in the Islamic Republic’s foreign policy, especially through gradual resolution of the nuclear dispute, the attitude of the international community, especially European countries, toward relations with Iran changed and related trends moved toward normalization. Of course, there is still a long way before relations between Iran and Europe would reach the point where they stood a decade ago, but the process of improving these relations has already started. Following the historic nuclear agreement between Iran and the P5+1 group in the Austrian capital, Vienna, on July 14, 2015, which is known as the Joint Comprehensive Plan of Action (JCPOA), and especially after the implementation of JCPOA started, there have been clear signs on the horizon about boosting bilateral cooperation in various economic and political fields.

European countries, some of whom were members of the P5+1 group, have not only played a decisive role in the process of nuclear talks with Iran, but have been sending strong positive signals to Iran after the achievement of the nuclear deal; signals, which contained clear and explicit messages about their willingness to improve ties with Iran in various fields. Senior officials of major European countries, accompanied by big trade and economic delegations, started their visits to Iran soon after the conclusion of the nuclear deal. Germany was forerunner of improving ties with Iran, which first sent its vice chancellor followed by its minister of foreign affairs to Tehran. This was followed by visits to Iran by a number of economic and trade officials from various German states, who were also accompanied with big delegations. France and the UK also sent their foreign ministers at the top of political and economic delegations to Tehran. Italy, as the fourth biggest European power, also sent a major economic delegation along with two state ministers to Tehran. In addition, the European Union’s foreign policy chief and chairman of the European Parliament have paid visits to Iran during past months.

Ministers and other high-ranking political and economic officials from other European countries like Austria, Belgium, Poland, Serbia, the Czech Republic, Spain and Switzerland, among others, have not been indifferent toward future of their relations with Iran and have mostly visited Tehran accompanied by their businesspeople and industrialists.

Such trips along with various remarks made by Iranian and European officials show that both sides are not satisfied with the current level of relations and plan to expand those relations. According to a report by Tehran Chamber of Commerce and Industries, the volume of trade exchanges between Iran and Europe stood at over 25 billion euros before intensification of nuclear sanctions against Iran, but the figure fell to about six billion euros in 2013. Following the election of the eleventh Iranian administration, subsequent changes in the two sides’ approaches to bilateral relations paved the way for gradual growth of economic relations between Iran and the European Union and the volume of bilateral exchanges grew 14 percent in 2014 to hit about eight billion euros.

Statistical body of the European Union, the Eurostat, has released new figures on the Union’s trade exchanges over the first four months of 2015, announcing that during this period, trade exchanges between Iran and Europe have grown by nine percent compared to the corresponding period of the preceding year to stand at over 2.4 billion euros.

The current trend of relations between Iran and the European Union shows that both sides are aware of each other’s positions and capabilities. European countries, which played an important role in the nuclear talks with Iran, are putting emphasis on the important role of the Islamic Republic at regional and global levels. Meanwhile, positive steps that Iran has taken through its participation in international peace talks on Syria have raised hope among European sides about future outlook of political and diplomatic interactions with Iran. It seems that Iran and the European Union are trying through this process to gradually take advantage of new conditions and capabilities of each other in order to first expand economic cooperation and then find ways for the resolution of other differences and reduction of tensions, especially in security and political fields.

The ongoing visits to Italy and France by the Iranian president can be assessed within the same framework. These two European countries are among influential members of the European Union in terms of both economic and political power, and are among few European powers capable of making important decisions. Therefore, there is hope that the Iranian president’s trip to European countries, which comes after long years, would be able to cause Europe’s approach to Iran to become more logical and balanced, and finally end in the normalization of relations between Tehran and major European capitals.

Europe, for its turn, is well aware of Iran's regional standing, especially in political and economic fields. At a time that the Middle East has turned into a playground for the activities of the most violent terrorist groups and the scope of terrorist operations by these groups has grown to include even the heart of Europe, that is, Paris, and other European cities, Iran is the sole country in the Middle East, which enjoys security and stability. The European Union has found out that by accepting the role, standing and power of Iran in this region, it can take positive and constructive steps toward fighting violence and extremism, which are major phenomena that have given birth to security crises and such challenges as the influx of asylum seekers into Europe. A major sign of a positive change in Europe’s political approach to Iran was the official invitation extended to Iran to take part in international peace talks on Syria in addition to shaper criticism raised by European countries of policies that some Arab countries, including Saudi Arabia, have adopted in supporting terrorists. At present, European countries hope that through international cooperation with such a regional power as Iran, they would be able to restore security to Syria and the Middle East, and subsequently to Europe.

On the other hand, Europe believes that Iran's economic structure is avidly in need of cooperation and transfer of new technologies, and is trying at a time that it is suffering from economic recession, to take advantage of cooperation in this field as a foundation for its future relations with Iran. On the other hand, the Islamic Republic, with an 80-million-strong domestic market, can turn into an arena for joint production and a gateway for entry of European commodities to neighboring states. One of the most important issues of interest to Europe in this regard is the issue of energy. Europe is seriously trying to diversify its energy sources and transfer routes in order to make sure about security of energy supply by reducing its reliance on the Russian oil and gas. Therefore, finding safe and more economical routes for transfer of energy, especially natural gas, from Iran to Europe can be seriously put on the agenda of the European countries. Not a long time has passed since the beginning of the implementation of JCPOA, but Europeans have already begun oil trade with Iran and the biggest oil refinery in Greece has signed the first oil contract with Iran subsequent to the removal of sanctions against Tehran. Other areas such as automobile manufacturing, air transportation and tourism are also of high importance to the two sides.

Last but not least, despite a host of differences between the two sides, Iran and European countries have now reached the conclusion that they must move in line with their common interests and let interaction and cooperation govern Tehran’s relations with all European countries, especially the member states of the European Union, by redefining their relations under the new circumstances.

Key Words: Iran, Hassan Rouhani, France, Italy, Europe, Economic Cooperation, Resolution of Differences, Reduction of Tensions, Joint Comprehensive Plan of Action (JCPOA), P5+1, European Union, Middle East, Terrorist Groups, Arab Countries, Syria 

Source: Islamic Republic News Agency (IRNA)
http://irna.ir/
Translated By: Iran Review.Org

Link for Further Reading: Tehran-Rome Relations: Looking to the Future on the Background of a Prosperous Past

*Photo Credit: ISNA, Fararu

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