Turkey, Iran set to boost economic ties

Turkey and Iran are working to boost their trade and business ties with a new inter governmental mechanism to cut bureaucratic red tape as the interim nuclear deal between the West and Iran paves the way for partial lifting of sanctions on the latter. "Political differences between Turkey and Iran especially over Syria remain. The visit and signing of landmark deal on sort of joint-cabinet meeting mainly aims to develop economic relations between the two neighbors," Idris Gursoy, a Turkish analyst, told Xinhua. During Turkish Prime Minister Recep Tayyip Erdogan's visit to Iran, the leaders of both countries are expected to sign a high- level strategic cooperation agreement that aims to facilitate talks on a number of issues. Before departing for Tehran, Erdogan said in a press briefing at Ankara Esenboga Airport that he welcomed interim agreement between the West and Iran, expressing the hope that it would lead to a definitive deal on removing sanctions. Turkey is energy dependent country and wants to export more oil and gas from Iran as the sanctions are gradually rolled back. Ismail Altunsoy, energy expert, wrote in Turkish daily Zaman, that Erdogan is expected to ask Iran to decrease the price of natural gas purchased by Turkey, which market experts have described as too high. Citing sources at the Energy Ministry, Altunsoy said Ankara currently pays 490 U.S. dollars per 1,000 cubic meters of gas, but only pays 335 U.S. dollars for gas purchased from Azerbaijan and 425 U.S. dollars from Russia. Turkey has long complained about the high prices of Iran's gas. Turkey's state-owned Petroleum Pipeline Corporation (BOTAS) applied to an international court of arbitration in 2012 to help reduce the price of Iranian gas. The case is still pending. The United States has expressed its uneasiness on Turkey's overtures with Iran, however, as Washington rushed the U.S. Department of the Treasury Under Secretary for Terrorism and Financial Intelligence David Cohen to Ankara on the eve of Iran's visit. Cohen warned that there are still significant sanctions in place on Iran and that business deals with Iran should be postponed. "Iran is not open for business. Sanctions on Iran remain in place and are still quite significant, and businesses that are interested in engaging with Iran really should hold off," said Cohen on Monday after meeting Turkish foreign ministry undersecretary Ferdiun Sinirlioglu. "The day may come when Iran is open for business, but that day is not today," emphasized Cohen. Cohen also said that he discussed the business deals of state- lender Halkbank which has been processing oil and gas payments with Iran. The bank manager was detained last month as part of the investigation into money laundering activities involving an Iranian national Reza Zarrab who was also detained pending the trial. The trade volume between Turkey and Iran reached 21.9 billion U. S. dollars in 2012. In the first eleven months of 2013, according to the latest available data from Turkish statistics agency, the trade volume dropped by 35 percent to 13.5 billion U.S. dollars from 20.9 billion U.S. dollars over the same period in 2012. Turkish Economy Minister Nihat Zeybelci said on Wednesday that the gold trade with Iran in the first 11 months of 2013 was 1.7 billion U.S. dollars as opposed to 6.5 billion U.S. dollars in 2012. During his visit to Turkey earlier this month, Iranian Foreign Minister Mohammad Javad Zarif and Turkish foreign minister Ahmet Davutoglu said Turkey would like to increase its trade volume with Iran in the next two years, targeting 30 billion U.S. dollars. He added that trade volume can even increase to 50 billion U.S. dollars if legal issues can be worked out. The high-level strategic council mechanism is intended to deliver that ambitious goal. "Turkey has signed high-level strategic cooperation agreements with many close neighbors, but signing one with Iran has never been mentioned before. It is a sign of developing closer relations, " said Bayram Sinkaya, an expert on Iran issues from Yildirim Beyazit University. Erdogan is accompanied by his foreign, energy and economy ministers during his two-day official visit and will be expected to meet Iranian President Hassan Rouhani for the first time since he was elected last summer. Rouhani is also expected to pay a visit to Turkey in February. Turkish-Iranian relations gained momentum after Rouhani was elected as Iran's new president. Though Turkey and Iran back different sides in the Syria conflict, they have mutual concerns about a reawakening of sectarianism in the region and have agreed to work together against sectarian threats.