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Eyeing sanctions thaw, delegates race to Iran

File - Iran’s car market is gearing up for a new era in the wake of the lifting of sanctions that had almost choked it.

TEHRAN: Six months after the inauguration of Iran’s moderate President Hassan Rouhani, Western diplomats and businessmen are racing to Tehran hoping that a diplomatic thaw will reopen lucrative markets.

A landmark agreement reached with world powers on Iran’s controversial nuclear program in November has raised hopes that Western sanctions could be lifted on the oil-rich country with a population of 76 million.

A delegation of 110 members of MEDEF – France’s largest employers’ union – is due in Tehran Monday to resume talks after an absence of several years.

No contracts will be signed due to the strict international sanctions still in place, but the visit is seen as a key step toward regaining a foothold in the country.

Iran’s auto market was once dominated by French giants including Peugeot, which halted operations in 2012, and Renault, which sharply scaled back its presence due to U.S. sanctions on spare parts deliveries in June 2013.

The French firms hope to regain their share against Asian rivals, particularly Chinese firms, which are not bound by the Western sanctions.

The number of cars produced in Iran was more than halved between 2011 and 2013, from 1.7 million to just 500,000.

Iran clinched the interim deal in November with the so-called P5+1 group – Britain, China, France, Russia, the United States and Germany – under which it agreed to curb its nuclear activities in exchange for sanctions relief.

The six-month agreement, which officially took effect Jan. 20, is aimed at buying time for a comprehensive agreement.

Western nations have long accused Iran of pursuing a nuclear weapons capability alongside its civilian program, charges denied by Tehran.

The breakthrough in the talks has been largely attributed to the election last year of Rouhani, a reputed moderate who had vowed to pursue a diplomatic solution to the nuclear impasse.

“Among the regional countries and compared to Syria, Iraq, Egypt and Libya, Iran is paradoxically known to enjoy a remarkable stability,” an Iranian analyst, speaking on condition of anonymity, said.

Iran has also seen recent high-profile political visits, including by Turkish Prime Minister Recep Tayyip Erdogan, who led a delegation last week aimed at boosting economic ties between the two countries, which back opposite sides in Syria’s civil war.

Italian Foreign Minister Emma Bonino visited Tehran in December.

And Swedish Foreign Minister Carl Bildt is due to arrive in Tehran Monday, while his Polish counterpart Radoslaw Sikorski is expected in late February.

The recent visits of former British foreign minister Jack Straw and ex-U.N. chief Kofi Annan could be added to the list.

Iran’s diplomatic ties with Western countries were severely strained under Rouhani’s predecessor Mahmoud Ahmadinejad, known for his hard line on the nuclear program and incendiary rhetoric toward Israel.

“These visits are a sign that the taboo of sanctions has been shattered,” Amir Mohebian, a political analyst, said.

“This is already a major success for the diplomacy of President Rouhani,” he added

There is no sign of any diplomats from the United States – still dubbed the “Great Satan” by Iran’s hard-liners – making their way to Tehran.

But U.S. Secretary of State John Kerry has met repeatedly with his Iranian counterpart Mohammad Javad Zarif, and Sunday the two met on the sidelines of a Munich security conference to discuss the next round of nuclear talks.

Iran is set to resume negotiations with the P5+1 group in Vienna on Feb. 18.

 
A version of this article appeared in the print edition of The Daily Star on February 03, 2014, on page 5.

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Summary

Six months after the inauguration of Iran's moderate President Hassan Rouhani, Western diplomats and businessmen are racing to Tehran hoping that a diplomatic thaw will reopen lucrative markets.

A landmark agreement reached with world powers on Iran's controversial nuclear program in November has raised hopes that Western sanctions could be lifted on the oil-rich country with a population of 76 million.

The number of cars produced in Iran was more than halved between 2011 and 2013, from 1.7 million to just 500,000 .

Italian Foreign Minister Emma Bonino visited Tehran in December.

Iran is set to resume negotiations with the P5+1 group in Vienna on Feb. 18 .


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