Turkey and Iran agree to boost trade, despite differences over Yemen!

Turkey and Iran agree to boost trade, despite differences over Yemen!

-Dr. Abdul Ruff


The relations between Turkey and Iran, firmly rooted in historic cultural bonds, signify rapport between Europe and Asia as the President of Turkey, Europe’s only Muslim nation, comes to Iran in West Asia to sign mutually beneficial economic deals with. Both Turkey and Iran believe that trade relations can heel all political wounds and remove the stains thereof.

On his visit to Tehran, Turkish President Tayyip Erdogan and his Iranian counterpart Hassan Rouhani agreed to boost trade and signed a slew of deals at a meeting on April 07. Erdogan’s one-day visit to Iran comes as relations between Ankara and Tehran – already strained by disagreements over Syria – have been battered by events in Yemen, where they have backed opposing sides. Erdogan and Rouhani diplomatically steered clear of directly addressing differences over Yemen.

The two presidents signed eight agreements and took pains to emphasize the need for greater economic cooperation, with Erdogan saying that the two countries were far behind a target to lift trade volume to $30 billion. Trade between the two totaled around $14 billion in 2014. He also said Turkey and Iran should start trading in their own currencies instead of dollars or Euros to avoid foreign exchange volatility.

Erdogan has accused Iran of attempting to dominate the region. Some Iranian lawmakers had called for Tehran to cancel Erdogan’s visit, with one politician saying the Turkish president wanted to rebuild the Ottoman Empire. But analysts have said that the friction between the two neighbours will be kept in check by economic dependency –Turkey needs Iranian gas and sanctions-hit Tehran desperately needs export markets.

Speaking at a joint news conference broadcast on Turkish television, both Erdogan and Rouhani sought to play down the regional tension, without making any concrete suggestions. “I don’t look at the sect. It does not concern me whether Shi’a or Sunni, what concerns me is Muslims,” Islamist leader Erdogan said. “We have to put an end to this divisive bloodshed, this death.” Erdogan, a devout Sunni Muslim has backed a Saudi-led military campaign against Houthi insurgents in Yemen. Tehran supports the Shi’ite Houthis. “We both believed that it is necessary for us to witness the end of war and bloodletting in Yemen as soon as possible,” Rouhani said.

Earlier, in May 2010, Turkish PM Erdogan made an unscheduled trip to Tehran to make an agreement to outsource Iranian uranium enrichment to his country to avoid further sanctions on Iran. In supporting Iran after the agreement Erdogan turned the question back on the international community. “In fact, there is no nuclear weapon in Iran now, but Israel, which is also located in our region, possesses nuclear arms. Turkey is the same distance from both of them. What has the international community said against Israel so far? Is this the superiority of law or the law of superiors?”.  This comes after growing pressure from the USA and the UK to support sanctions against Iran.  The decision of Turkey to host a radar system to track missiles launched from Iran has been seen by the Iranians as a serious break in relations.

Iran and Turkey have very close trade and economic relations. Both countries are part of the Economic Cooperation Organization (ECO). Turkey receives many Iranian tourists each year and economically benefits from Iranian tourism Iranian First Vice President Mohammad-Reza Rahimi announced in October 2012 that the speed of trade exchanges between Iran and Turkey has accelerated and was close of reaching the goal of 30 billion dollars per year. He added that the growing trade relations between Tehran and Ankara indicate the two countries’ willingness to strengthen mutual ties. Bilateral trade between the nations is increasing. In 2005, the trade increased to $4 billion from $1 billion in 2000. Iran’s gas export to Turkey is likely to be increased. At present, the rate is at 50mm cm/d. Turkey imports about 10 billion cubic meters a year of gas from Iran, about 30 percent of its needs. Turkey plans to invest $12 billion in developing phases 22, 23 and 24 of South Pars gas field, a senior Iranian oil official told Shana.ir. Two-way trade is now in the range of $10 billion (2010), and both governments have announced that the figure should reach the $20 billion mark in the not too distant future.

Turkey, the largest NATO member in the region, hosted the establishment of a NATO missile shield in September 2011. The establishment of NATO defense shield has caused a crisis between Turkey and Iran. Iran claimed that the NATO missile shield is a US ploy to protect Israel from any counter-attack should Israel target Iran’s nuclear facilities. In addition, Iranian Ayatollah Ali Khamenei stated that Turkey should rethink its policies over Syria, the NATO defense shield, and promotion of secularism over the Arab world following the Arab Spring. 54% of Turks oppose Iranian acquisition of nuclear weapons, 46% consider a nuclear-armed Iran somewhat a “threat”. Iran accused USA of misusing Turkey against interests of Arab nations.

Relations between Turkey and Iran have a long history but in modern times both Muslim nations have drastically their trade to offset any political difference.  On 22 April 1926 the First “Treaty of Friendship” between Iran and Turkey was signed in Tehran. The basic principles included friendship, neutrality and nonaggression towards each other. The relations between the Islamic Republic of Iran and the Republic of Turkey have been generally peaceful since establishment of the modern states. Turkey has an embassy in Tehran, and consulates in Tabriz and Urmia. Iran has its embassy in Ankara, and consulates in Istanbul, Erzurum, and Trabzon. Iran and Turkey are major trade partners, but sometimes have also been strained.

On 8 July 1937 a Treaty of Non-aggression was signed between Turkey, Iran, Iraq and Afghanistan. This treaty would become known as the Treaty of Saadabad. The purpose of this agreement was to ensure security and peace in the Middle East. A period of coldness passed after the 1979 Iranian Revolution which caused major changes in Iran and the Middle Eastern status quo. Today Iran and Turkey closely cooperate in a wide variety of fields that range from promoting stability in Iraq and Central Asia to  favorite US themes like fighting  terrorism, drug trafficking,.

Repeatedly Erdogan has directly slammed Iranian policy on Syria, causing the death of at least 250,000 Muslims. While discussing Erdogan, an Iranian official said, “The death of 250,000 in Syria was caused by nations that back the terrorists in Syria. Turkey is one of those states, and it has full responsibility for the situation today.

Erdogan personally knows that Iran is innocent. Iran is helping a legitimate government restore control over its land and fight terrorists, possibly  recruited by anti-Islamic powers,  coming from around the globe to kill and terrorize civilians.

A new Iranian-Turkish partnership has been evolving, particularly after the signs of rapprochement between the United States and the Islamic Republic emerged, and after the interim nuclear deal was reached. In addition, the growing Iranian-Turkish partnership in the region is due to the declining influence and power of the United States in the region.

Almost a year since his election, President Hassan Rowhani visited Turkey last year – a landmark trip of the first official high-level meeting between Tehran and Ankara in nearly 18 years. The last official visit to Turkey by an Iranian president was in 1996 by Akbar Rafsanjani, marred by controversy due to the fact that he declined to visit the mausoleum of modern Turkey’s revered founder Mustafa Kemal Ataturk.

Turkey significantly relies on Iran’s oil and gas for its economy. Despite the economic sanctions and Western powers’ concerns, Ankara thinks it is critical to keep the economic alliance with Tehran and have access to some of Iran’s largest oil and gas reserves. A recent oil sale reached approximately $12 billion, in which Turkey and Iran reportedly evaded the economic sanctions on the Islamic Republic by exchanging gold rather than dollars.

From Turkey’s perspective, having strong links to the Islamic Republic would also assist Turkey to utilize Iran’s influence over the Iraqi Shiite-led government, for reaching significant oil deals.

When it comes to the geopolitics and balance of power in the region, some Iranian leaders do not view other Arab countries in the gulf as natural allies, but instead as competitors and rivals in oil/gas trade.  This is a primary reason that makes Iranian leaders view Turkey as a major and key partner – strategic, geopolitical, and economically in the region. Iranian leaders have been capable of avoiding USA and international economic sanctions while trading with Turkey. In other words, the Turkish market is a crucial platform for Iran’s economy and Iranian firms that export nearly thousands of products to Turkey.

Since Turkey is a member of NATO and a close ally of USA, Iran needs the cooperation with Turkey to send trustworthy and constructive signals to the West. Rowhani’s foreign policy agenda of “prudence and moderation” is aimed at easing Iran’s isolation on the global stage. Both Iran and Turkey view the Kurdish communities near their borders as a significant opposition to their consolidated power.

Due to the geopolitical, strategic, and economic landscapes, along with common objectives and interests, Turkey and the Islamic Republic appear to need each other’s cooperation more than any time before. Although there are some major tensions and disagreements over the Syrian crisis and Egypt, Turkey and Iran bear more shared objectives that draw them to each other, rather than push them apart.

Erdogan’s Tehran visit assumes significance as Saudi Arabia and four other Gulf Arab states have waged two weeks of air strikes against Houthi forces who control the Yemeni capital Sanaa and have been fighting for control of Aden. Despite heavy bombing of their convoys and weapons depots, the Iran-allied Houthis have fought their way into central Aden, the last major foothold of fighters loyal to Saudi-backed President Abd-Rabbu Mansour Hadi.

The end of USA/UNSC sanctions on Iran would mark a new era in Turkey-Iran relations. It is therefore unlikely that Turkish-Iranian economic relations will suffer because of problems in Mideast. Even politically, both are trying to find a common language.


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