The Shadow of Tension over Economic Relations between Iran and Turkey

The potential impact of political tensions on trade relations between Iran and Turkey is the subject of a conversation between Fahimeh Khodr Heydari and Fereydoun Khavand, an economist residing in France. Following a very harsh criticism from Turkish President Recep Tayyip Erdoğan regarding Iran's policies in the Middle East, tensions in relations between Tehran and Ankara have escalated. What consequences does this crisis have for the trade relations of the two countries? Fereydoun Khavand: Iran and Turkey have had very prosperous trade relations over the past two decades. It is worth noting that from 2000 to 2012, in a span of twelve years, Turkey's exports to Iran surged from 533 million dollars to 10 billion dollars, and Iran was able to increase its exports to Turkey, which consists of about seventy percent gas, from approximately two billion dollars to 12 billion dollars. In other words, the volume of trade relations between the two countries reached 22 billion dollars in 2012, which, due to difficulties arising from sanctions, fell back to 15 billion dollars in 2013 and likely increased to about 18 billion dollars in 2014. Additionally, Turkey and Iran signed a preferential trade agreement that came into effect on January 1, 2015, with one of its main goals being to reduce customs duties and tariffs between them. Both sides hope to increase their trade volume to 30 billion dollars in the not-too-distant future. There is no doubt that if tensions in relations between Tehran and Ankara escalate concerning the ongoing crises in the Middle East, their economic relations cannot remain unaffected. In the event of heightened tensions in political relations between Iran and Turkey, which side will suffer more? Both Iran is a significant economic opportunity for Turkey, and Turkey is for Iran. Turkey needs Iran because it supplies a significant portion of its oil and gas needs from this country. The Iranian market is a great boon for Turkey's industrial goods, ranging from textiles and clothing to home appliances. Approximately 3,500 Iranian-invested companies operate in Turkey. About 1.2 million Iranian tourists travel to Turkey every year and spend money there. Iran also needs Turkey, including as a market for oil and gas, and as a transit route to European markets. Can the economic circles in Iran and Turkey prevent the intensification of the crisis in relations between the two countries? Certainly, economic circles, especially in Turkey, which have enormous interests in the Iranian market, are calling for a reduction in tensions in the relations between the two countries and can influence political decision-making. Iran and Turkey, as two major regional powers, can become pillars of convergence in the Middle East region. Unfortunately, amidst the various crises plaguing this region, there is a danger that discourse aligned with nationalism or extreme religious ideologies may overshadow economic logic and long-term interests. Economic interests and circles can play a significant role in countering this danger.