Gas transfer to Europe key in Turkey-Iran relations

State Minister Cevdet Yılmaz (L) and the Iranian Foreign Minister Manucher Mutteki as they proceed to a Joint Economic Commission meeting in Ankara.

February 04, 2010, Thursday/ 16:37:00
The transfer of natural gas from Iran plays a prominent role in efforts to boost cooperation in energy between Turkey and Iran, State Minister Cevdet Yılmaz has said.

Speaking to reporters in Ankara ahead of a Joint Economic Commission (KEK) meeting, which was also attended by the Iranian Foreign Minister Manouchehr Mottaki on Wednesday, Yılmaz said the government is committed to working to improve relations with its neighbor Iran and that mutual gas transfer projects were a driving force behind such efforts.

Yılmaz said his government’s attempts to improve ties with Iran aim to render the 21st century “the golden age” of Turkish-Iranian relations by carrying them from the field of energy to larger areas with a spillover effect, which in turn will bring about peace and prosperity to the entire region. Mottaki agreed with Yılmaz’s remarks, claiming that both countries are on the verge of a “historical era.”

Making mention of energy relations between the two countries, Yılmaz said a Turkey-Iran pipeline was among the most significant joint projects both countries have realized over the years. Recalling that the pipeline transfers natural gas worth around $2 billion every year, the minister said the government expects this amount to increase in the years to come. “We believe projects for the transfer of Iranian natural gas to Europe via Turkey will give a momentum to relations between the two largest economies in the region.” In this regard, Yılmaz went on to say, Turkey valued Iran’s contributions to the Nabucco natural gas pipeline project.

Following Prime Minister Recep Tayyip Erdoğan’s latest visit to the neighboring country, Iran and Turkey signed a number of deals to facilitate the efficient flow of gas through Turkey to Europe, including accords on allocating some of Iran’s South Pars gas field to the Turkish Petroleum Corporation (TPAO), allowing Iranian gas to be transported across Turkey and Turkmenistan’s gas to be pumped to Turkey via Iran. Yılmaz said Turkey welcomed these developments. On the other hand, the rapprochement with Iran has attracted Washington’s discontent.

Less barriers to larger trade

Minister Yılmaz said during his speech at the opening of the KEK meeting that the trade volume between the two countries had exceeded $10 billion in 2008 for the first time in history; however, it retreated sharply to around $5.5 billion amid a harsh global economic crisis. “I still retain my hope that the figures will once again begin to rise,” he commented, adding his aspiration that the volume of trade will hit $30,000 in the next five years, which requires taking steps to abolish barriers from conducting commerce more freely.

He especially stipulated Iran’s protectionist policies such as high tariff rates, seasonal restrictions in its imports and a specialization customs application as major obstacles preventing trade between the two countries from increasing.

He reiterated Turkey’s insistence on initiating a “preferential trade system” with Iran while calling on Iran to show more commitment to approve the Economic Cooperation Organization Trade Agreement (ECOTA). He said Iran’s continuation of the process of liberalizing its trade is of utmost importance for furthering relations, adding that Turkey is ready to provide any support in helping Iran become a part of the World Trade Organization (WTO).

Other points stressed in Yılmaz’s speech were the creation of a common bank, establishing an Iranian bank in Turkey, jointly issuing a debit card, turning the Turkey office of Iran’s Mellat Bank into a bank, creating a “joint investment committee,” building industrial zones and free trade zones in especially the Qeshm and Kish islands in Iran’s Strait of Hormuz designed specifically for Turkish entrepreneurs and constructing airports to be operated by Turkey.

Speaking after the Turkish minister, Mottaki also expressed his hopes to realize the huge potential between the two countries.

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