TEHRAN : Iran’s business deals with 15 neighboring countries stood at 92.26 million tons worth $46.25 billion during the 11 months to Feb. 19, according to the latest data released by the Islamic Republic of Iran’s Customs Administration.
The UAE was Iran’s biggest trade partner with 21.3 million tons worth $18.8 billion. It was followed by Turkey with 18.78 million tons worth $10.31 billion and Iraq with 30.36 million tons worth $9.27 billion.
Total exports to neighbors stood at 70.26 million tons worth $23.53 billion.
Iraq with 28.02 million tons worth $8.22 billion was the biggest export destination. It was followed by Turkey with 15.3 million tons worth $5.61 billion, the UAE with 9.84 million tons worth $4.23 billion, Afghanistan with 3.85 million tons worth $1.66 billion and Pakistan with 2.63 million tons worth $1.13 billion.
Total imports from neighboring countries during the period hit 22 million tons worth $22.72 billion.
Shipments mainly came from the UAE with 11.46 million tons worth $14.57 billion, Turkey with 3.47 million tons worth $4.7 billion, Russia with 3.26 million tons worth $1.45 billion, Iraq with 2.35 million tons worth $1.05 billion and Oman with 925,442 tons worth $515.12 million.
Iran’s 15 neighboring countries are Iraq, Turkey, Afghanistan, Pakistan, Russia, Oman, Azerbaijan, Turkmenistan, Kuwait, Qatar, Kazakhstan, Armenia, the UAE, Bahrain and Saudi Arabia.
Iran traded $36.45 billion worth of non-oil goods with its neighboring countries in the last Iranian year (ended March 20, 2021).
The preceding year’s figure stood at $40 billion.
Neighbors account for about half of Iran’s total international trade.
UAE: Iran’s Top Trade Partner
The UAE is the biggest exporter to Iran among all countries as well as a major export destination for Iranian goods.
“Despite the significance of the UAE in Iran’s foreign trade, the two countries have yet to forge an agreement to avail themselves of preferential trade tariffs,” says Farshid Farzanegan, former chairman of Iran-UAE Chamber of Commerce.
“Due to geographical locations, cultural, trade and historical relations between Iran and the UAE, as well as the volume of annual imports, the country offers a golden opportunity for Iranian economic players,” he was quoted as saying by Fars News Agency.
“In 2019, the UAE’s exports stood at $248 billion while its imports hit $235 billion and as the world’s 24th largest exporter and 22nd largest importer, it has a significant position in the international economy and global value chains.”
According to Farzanegan, the UAE’s average trade volume with Iran since the fiscal 2010-11 stands at $16 billion. From the fiscal 2010-11 to fiscal 2018-19, the figure stands at $13 billion.
The average annual trade volume for the eight-year period stands at $13 billion with China, $5.5 billion with South Korea, $5.5 billion with Turkey and $5 billion with Iraq, indicating that the UAE has been the leading trade partner of Iran over the years.
According to Farzanegan, Iran’s major exports to the UAE are vegetables, lead, melon, grapes, spice and cement with each Iranian product having an over 10% share in the Emirati market.
Noting that the most important hurdle in the way of trade between the two countries pertains to banking and money transfer, he said the ceiling for insurance coverage of trade between the two sides is insufficient.
“It is not possible for traders to open letters of credit. Non-existence of consortiums for export of technical and engineering services is another problem,” he said.
“This is while trade infrastructure in the UAE is very strong, therefore, we must upgrade and develop our infrastructure accordingly to develop trade relations with this country.”
He noted that Iran’s geopolitical and geoeconomic advantages allow for transport of goods from Turkey and CIS states to the UAE.
The UAE-Turkey transit corridor through Iran became operational with the first shipment from the UAE port of Sharjah en route to the Turkish port of Mersin docking at the Iranian Shahid Rajaee port in November 2021 before reaching Turkey through the Bazargan border crossing in northwest Iran.
Mohammad Hossein Rezaian, an expert in the field of transit, told Mehr News Agency that the consignment entered the port of Shahid Rajaee in southern Iran on the Persian Gulf from the UAE and reached the Turkish port of Mersin.
Rezaian noted that the new route shortens the former transit route by 12 days, meaning that it will take eight days for the shipments to reach Turkey’s port through Iran from UAE’s Sharjah while the previous route had to cross the Bab al-Mandeb Strait, the Red Sea and the Suez Canal and all the way to Turkey, which would take 20 days.
Noting that the UAE has zero tariff on imports of almost all types of commodities except for Iranian cement with a 5%, Farzanegan said it is necessary for Iran to facilitate import from the UAE by establishing preferential tariffs.
Iran levies high tariff rates on imports, reaching as high as 40% on certain commodities.
“We practically have no preferential tariff agreement with any country. An agreement has been concluded with Turkey, negotiations have been held with Pakistan and during a recent visit of Minister of Industries, Mining and Trade Reza Fatemi-Amin to the UAE, negotiations have been held to this end, but an agreement has yet to be made.
An Iranian delegation led by Fatemi-Amin visited the UAE in February.
President of Iran Chamber of Commerce, Industries, Mines and Agriculture Gholamhossein Shafei and the Head of Trade Promotion Organization of Iran, Alireza Peymanpak, also accompanied the visiting mission, who took part in a joint forum titled “Business and Investment Opportunities” on Feb. 8.
Iran’s first trade center licensed by Trade Promotion Organization of Iran was recently inaugurated in Dubai.
As Iran Chamber of Commerce, Industries, Mines and Agriculture reported, the establishment is aimed at helping Iranian companies find a foothold in the UAE, Dubai in particular which happens to be one of the main hubs of Iran’s trade in the region.
It also seeks to use advanced Information Technology to create a platform that facilitates business activities of Iranian firms in the Emirati market by providing technical advice and consultation services.
Raisi in Qatar
President Ebrahim Raisi met Qatari Emir Sheikh Tamim bin Hamad Al Thani and attended a summit meeting of the Gas Exporting Countries Forum in Doha in March.
The two-day visit was at the official invitation of the Qatari Emir.
Qatari Minister of Transport Jassim Seif Ahmed al-Sulaiti met with Iranian Minister of Roads and Urban Development Rostam Qasemi, who was also part of the delegation visiting Qatar.
The two ministers reviewed aspects of cooperation between Qatar and Iran in transport, marine navigation, harbors, air transport and civil aviation, and ways of further enhancing them, the Qatari Ministry of Transport said in a statement.
Iranian Ambassador to Qatar Hamid Reza Dehqani also attended the meeting.
Iran and Qatar have been forging stronger economic ties ever since a number of Arab states led by Saudi Arabia abruptly severed diplomatic relations with Doha in June 2017 and imposed a blockade on the Persian Gulf country, accusing it of supporting terrorist groups.
The Qatari government denied the allegation as baseless, blasting the blockade as unjustified and a violation of international law.
Following the development, Iranian exporters have vied for the Qatari market in the absence of Doha’s traditional Arab partners.
Qatar shares the world’s largest natural gas field with Iran.
Resumption of Trade With Saudi Arabia
After a one-and-a-half-year hiatus in trade, Iran exported $39,000 worth of commodities to its southern neighbor Saudi Arabia since Raisi’s presidential term began in August, the spokesman of the Islamic Republic of Iran Customs Administration said a few months ago.
“Of the overall sum, $33,000 pertained to a kind of glass used in traffic signs and $6,000 belonged to tiles,” Rouhollah Latifi was also quoted as saying by Mehr News Agency.
“This marks a new beginning in Iran and Saudi Arabia’s economic, political and cultural relations after the two countries began negotiations to solve tensions.”
Sadreddin Niavarani, a member of the board of directors of Fruit and Vegetables Exporters Association, says Saudi Arabia can be a big market for Iranian agricultural products.
“Before tensions emerged between the two countries, Iran used to export around $1 billion worth of agricultural commodities to the Arab country annually. Our main exports were apple, kiwi, apricot, cherries, peach and nectarine,” the official told ILNA.
“The Saudi people have always taken a liking to Iranian products. There are no hard feelings between the businesspeople of the two countries and old trade partners have continued working with each other despite political issues.”
The official noted that the two sides continued trade exchanges even during tense ties, as commodities were traded through intermediaries.
“During the period and before negotiations started, Iranian products first went to countries such as the UAE, where their labels of origin would change and then the consignments were reexported to Saudi Arabia,” he added.
Niavarani believes political tensions can never cause serious and everlasting obstacles to commercial and financial interactions between the two nations.
“Agricultural products, in particular, will eventually find their way to their intended markets. Iran has high-quality agricultural products, which have their own consumers in destination markets. At present, people in Saudi Arabia prefer to purchase Iranian apples instead of Turkish ones for double the price,” he said.
Riyadh and Tehran cut diplomatic ties in January 2016 after the Saudi Embassy in Tehran was stormed by protesters after Saudi Arabia executed an eminent Shia cleric Sheikh Nimr al-Nimr without due process.