Page 20 - IRANRptFeb19

Bilateral trade between Turkey and Iran falls 10% y/y to $8.2bn in 10-month period
Iran’s exports to Pakistan reportedly growing at a healthy clip
Iran, Korea reportedly working on sanctions-shielded oil for goods
Turkmenistan.
Bilateral trade between Iran and Turkey in the first 10-months of this year fell 10% y/y to $8.2bn, the Turkish Statistical Institute (TUIK) said.
It’s early days for gauging how much respect Turkey is showing, and will show, towards the US sanctions targeted at trade with Iran, with the outcome in that area dependent on how Ankara’s multifaced rift with Washington evolves. However, Turkey has protested that there is no way it can countenance entirely ending the acceptance of gas or oil exports from Iran. Gas flows from Iran at this time of the year are particularly crucial to the Turks given the winter cold and Turkey is a big energy importer, thus it will take a lot of persuading to give up the convenience of taking crude from its next-door neighbour. In the meantime, Turkey is one of eight countries worldwide awarded a 180-day waiver permitting the purchase of Iranian oil shipments without fear of secondary sanctions kicking in.
In 2017, bilateral trade between the two neighbours from January to October stood at $9.12bn, according to TUIK.
Turkish exports to Iran in the first 10 months of 2018 decreased by 22% y/y. For the assessed 10 months of this year, Iran was ranked as the 20th largest export destination for Turkish products, and the seventh biggest sender of exports to Turkey.
Iran exported $860mn worth of goods to Pakistan in the first seven months of the current Persian year (March 21-October 22) compared to $688mn in the same period of the previous Persian year, according to an Iranian trade official based in the Islamabad embassy cited by Islamic Republic News Agency on December 11.
Since the recent election of Iran-friendly Pakistani Prime Minister Imran Khan, Pakistan has said it will revive several projects boosting its economic connectivity with Iran. Moves are to include restarting the long-forgotten Iran-Pakistan gas pipeline. Iran, which has the second largest gas reserves in the world, could theoretically use the pipeline capacity to meet 30% of the gas demand of its neighbour to the east, home to 213mn people.
The official, Mahmoud Haji Yousefipour, reportedly said that Iran expects its exports to Pakistan to show even more growth in coming months.
Given the approximate 25% y/y growth in Iranian exports to Pakistan in the seven-month period, the two countries’ trade volume had exceeded $1bn in value, he added.
Iran’s exports to Pakistan include industrial oils, bitumen, dates, pistachios, chocolate, flooring products, cement and industrial machinery.
Iran and South Korea are reportedly working to set up a barter mechanism similar to the delayed special purpose vehicle (SPC) proposed by the European Union which would exchange Korean products for Iranian oil, Islamic Republic News Agency reported on December 1. The idea of such mechanisms is enabling the continuation of trade flows through opaque trading systems that protect the involved parties from the US sanctions with which Washington is attempting to throttle the Iranian economy to force concession in Tehran’s approach to the Middle East. However, whether Seoul, crucially dependent on the Americans when it comes to dealing with the threat from North Korea, would really remain defiant should the Trump administration order it to shut down such a mechanism is rather open to question.
“According to the plan, goods will be given to Iranian importers and their price will be subtracted from the price of the oil exported to South Korea, and the
20 IRAN Country Report February 2019 www.intellinews.com