Iran-Turkey Trade Balance Favors Ankara

An examination of the trade balance between Iran and Turkey in the first half of this year indicates that Turkey's exports to Iran have increased by 30.4%, while Iran's exports to Turkey have decreased by 30%. IRNA, the Islamic Republic News Agency, reported that a significant part of the decline in Iran's exports to Turkey is due to the drop in oil prices in global markets. According to the report, the volume of trade between Iran and Turkey in the first half of 2015 reached $5 billion, 437 million, and 532 thousand, which is a decrease of over 16.5% compared to the same period last year. The 30% increase in Turkey's exports to Iran occurs while Turkey has recently witnessed significant unrest along its borders with Syria and Iraq, issues arising from the presence of approximately 1.7 million Syrian refugees, and recent conflicts with the Kurdistan Workers' Party (PKK). These factors can impact a country's economic performance and exports, but it seems that Turkey's economic position has not been shaken by the unrest, altering the trade balance in its favor. It is always important in Iran's trade relations with other countries that, according to Valiollah Afkhami Rad, Deputy Minister of Industry, Mine, and Trade, based on customs statistics, Iran's share in the negative trade balance remains significant, with a negative $2.7 billion in that year, even though this trend has slightly improved. What is certain is that Iran's economic situation under sanctions has been such that it could not insist on a specific share in the trade balance. However, are there established principles in the economic laws of countries to prevent their trade from declining, and can Iran use the economic models of such countries to formulate a trade policy with a defined trade balance? Hassan Mansour, an economist residing in London, believes that having a positive or negative trade balance with a country has its meaning, but overall, it is not unusual. In the long run, what matters is that exports should equal imports. We do not say that the trade balance should be balanced because otherwise, trade would not be possible. What we sell is sold in currency, and what we buy is also bought in currency, so ultimately these must balance out. Iran does not have a negative balance with the entire world; in fact, in the statistics for the month of Farvardin, Iran has a negative balance with 18 countries and a positive balance with 31 countries. What is important is the composition of these exports and imports. Recently, the Iranian Minister of Industry mentioned an interesting point: that they will not open the doors after lifting sanctions but will set conditions that if you gain access to the 80 million market of Iran, you must also grant access to the 400 or 500 million European market. Such statements are only for domestic consumption to show what products Iran has that Europe might be interested in buying. The emergence of a new position and the improvement of Turkey's standing in its trade balance with Iran occurs while Adnan Yildirim, Turkey's Deputy Minister of Economy, along with a business and industrial delegation from Turkey, met with the head of the Iran Chamber of Commerce, Industries, Mines, and Agriculture on August 10. In this meeting, Mohsen Jalalpour, the head of the Chamber of Commerce, referred to the goal of achieving $30 billion in trade between Iran and Turkey, stating that this goal is achievable, and if it has not been realized so far, it is because the private sectors and relevant organizations of both countries have not utilized their capacities. Jalalpour pointed out a series of inequalities in the trade process with Turkey, suggesting that these reasons might explain Turkey's reluctance to increase trade volume with Iran, and that not only will the $30 billion trade target not be achieved under these conditions, but the current volume may also decrease. Jalalpour's reference to the problems and inequalities occurring during trade at the Iran-Turkey borders includes the recent demand for $1,400 for each bus entering from Iran, while only a quarter of this amount is charged for buses entering from Turkey to Iran. Additionally, Iranian trucks coming from Europe to Iran are not allowed to load in Turkey, while Turkish trucks are permitted to load on their return from Iran to Turkey.