Iran has voiced its desire to establish “close relations” with countries in the region, as well as coordinating with Europe, with the aim of alleviating pressure on the Iranian economy.
At the recent Munich Security Conference, Iran’s Foreign Minister Mohammad Javad Zarif called on European powers to exert greater efforts to salvage the nuclear deal following the US withdrawal. Iran complained that Europe’s new payment mechanism of not using the US dollar in trade transactions with the Islamic nation has yet to reach the goals as committed to by the United Kingdom, Germany and France.
After repeatedly criticising the delay of European countries in fulfilling their commitments to save the nuclear deal, Tehran has asked Europe to “never do things by halves” in order to match its statement of supporting multilateralism.
In an effort to realise its commitment to protect Iran’s interests under the previously signed nuclear agreement, the UK, France and Germany recently announced the creation of a payment channel SPV (Instrument in Support of Trade Exchanges, INSTEX) to support the trade exchange with Iran without having to use the US dollar. However, there remains disagreement among the European nations on this issue. Many countries do not want to discontent the US and continue to support the maintenance of sanctions against Iran. Meanwhile, despite the efforts by the UK, France, and Germany to launch INSTEX, the new tool has not guaranteed itself open to the third-party countries which pursue legal cooperation with Iran.
Iran and the European Union (EU) seeking ways to “avoid” US sanctions against Tehran has benefited both sides. Currently, the five EU member states with the largest trade exchanges with Iran are Italy, Spain, Germany, France and Greece.
Iran’s major exports to the EU market include fossil fuels, oil, minerals, iron and steel, and fruit. Meanwhile, the Islamic nation mainly imports nuclear reactors, boilers, machinery, mechanical equipment and parts, machinery and electrical devices. In the first nine months of 2018, Iran exported EUR8.3 billion worth of goods to the EU member states, up 25.1% year on year.
In addition to the goal of preserving its interests in relations with the EU, Iran is also looking towards reducing tensions and expanding cooperation with countries in the region. Iranian President Hassan Rouhani recently announced that Tehran wishes to establish close ties with all nations in the Middle East. As an influential country in the region, Iran is embroiled in fierce competition with the regional powers in many political and economic areas. Iran and Saudi Arabia are believed to support rival parties in the battles in Syria and Yemen. Tehran once left open the possibility of military action in the Gulf to prevent oil exports of other countries, including Saudi Arabia, in response to US sanctions against Tehran’s crude oil shipment. Therefore, the Iranian leader’s recent statement on the establishment of close relations with regional countries is said to be Tehran’s softer step in an approach towards addressing tensions in the region.
Despite making softer adjustments in fostering economic cooperation with countries, Iran consistently defends its tough stance on the right to develop a missile programme for defence purposes. Deputy Commander of Islamic Revolutionary Guard Corps (IRGC) Brigadier General Hossein Salami warned that Europe should not seek to prevent Tehran from developing missiles, otherwise Iran will be forced to increase the range of its rockets. Iran also warned the powers against seeking new negotiations or making recommendations or requests concerning Iran’s missile power. The Islamic nation has continuously announced its defence technology achievements as a message on its power aiming to deal with pressure from the West.
In the context of dialogue and confrontation almost paralleling between Iran and Western countries, the fact that Iran is currently striving to coordinate with Europe and other countries in the region is expected to help “cool down” tensions. Dialogue and cooperation still remain a trend that needs to be sustained and promoted in resolving the deadlocks related to the Iranian nuclear issue.
