Turkey and Iran: Erdogan's Iran visit to raise  ties

-DR. ABDUL RUFF COLACHAL 

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1. Visit

As two  Muslim neighbors, Iran and Turkey enjoy many commonalities and many cooperation opportunities.

The delink of military ties with Israel has brought Islamist Turkey closer to the Islamic Republic of Iran which  has been the  target of the Zionist regime. 

Turkish Prime Minister Recep Tayyip Erdogan took a break from the turbulent politics at home, involving corruption scandal, to do some fence-mending with Iran. 

The boisterous and recently beleaguered Turkish leader Erdogan arrived in Tehran on 29th January for a two-day state visit in a mission to boost trade and energy-related issues, besides rebuilding relations with Iran that were damaged recently over Erdogan’s vociferous criticism of Iranian-proxy and Syrian President Bashar Al-Assad. Erdogan was welcomed by Iranian First Vice President Eshaq Jahangiri.

Erdogan met Iranian Supreme Leader Ayatollah Ali Khamenei and President Hassan Rouhani for the first time since the latter's election in June. The visit was slated to revolve around discussions over ties between Ankara and Tehran.  They  discussed the “brotherhood, love and friendship” that exist between Tehran and Ankara, as well as the “fertile ground” and opportunities for expansion and the deepening of ties between the two nations. 

Turkey’s intent for increasing diplomatic presence in Islamic world especially in Mideast has made Istanbul to make Iran a natural destination for better ties. Increasing exports to and entering into lucrative joint projects with Iran is one way to achieve this.

Syria, developments in the Middle East and Iran’s nuclear program and agreement with the UNSC were addressed in the talks Erdogan has in Tehran with Supreme Leader Ayatollah Ali Khamenei, Rouhani and other officials. 

When Rouhani became the Iranian president, Turkey and Iran decided to communicate frequently, if possible every month, to discuss our mutual agendas and exchange views. Ahmet Davutoglu, Turkish Foreign minister said “I can say that we have accomplished this in the past five months”. 

The two countries are at odds over Syria, unreservedly supporting opposite sides in the conflict and having fundamentally different positions on the future of President Bashar al-Assad. While Ankara hopes for the demise of Assad and his regime, Tehran is clearly working to ensure that both remain in power in any settlement reached.

Recep Tayyip inked three trade deals with the Islamic Republic. The agreements include reductions in tariffs on 220 Turkish industrial products and on Iranian food products, and come amid an easing of economic sanctions on Iran, as part of an interim deal with Western powers. The two countries are planning to establish a High Level Cooperation Council mechanism before Erdogan visits Iran. In addition, the countries are planning to increase trade, aiming for $30 billion in the next few years, with a further possibility for $50b.

The United States has been unhappy over continued trade with Iran by its Turkish ally sidestepping the sanctions regime, and has blacklisted some Turkish firms involved. U.S. Treasury Under Secretary David Cohen, who visited Turkey just before Erdogan's Iran trip, warned the Turkish government against any rapid improvement of trade and economic links with the Islamic Republic before a final nuclear agreement is struck, according to Turkish media. 

 The USA has blacklisted some Turkish companies because of their dealings with Iran. Washington has been unhappy with Turkey’s economic and trade ties with Tehran and the way Ankara has been circumventing US sanctions to pay for oil purchased from Iran by other means, including gold shipments through state banks. It's no wonder, then, that David Cohen, the US secretary for terrorism and financial intelligence, hurried to Ankara on Jan. 27, the day before Erdogan was due to travel to Tehran, warning that “Iran is not open for business yet” despite the easing of sanctions. 

2. Main goal

Objective of Erdogan’s two-day visit to Iran, according to media reports, is to address Syria, economic ties.  Considering that the economy and energy ministers are accompanying Erdogan, this trip was business-targeted. The main focus of Erdogan's visit, therefore, was expanding economic cooperation, finessing any political disputes for now.

With Erdogan facing a potential economic meltdown at home, he needs to secure as much business as he can for Turkey. Hard currency invested in Turkey as “hot money” has begun fleeing due to a combination of the turbulence generated by Erdogan’s policies at home and recent decisions by the US Federal Reserve. To shore up the Turkish lira, which has gone into a tailspin against the dollar, and to make up for losses caused by the flight of hot money, Turkey has to increase foreign capital inflows. 

The easing of Western sanctions against Iran has created a host of business opportunities that have whetted Turkey’s appetite. That Erdogan is being accompanied to Iran by his ministers for the economy, energy and development underscores this.

With few areas of political agreement on the Middle East, the only one left for any serious improvement in ties for their two countries is in the economic sphere. The main focus of Erdogan’s visit is therefore expected to be economic cooperation.

Turkey, however, has continued to promote trade with Iran regardless of US pressure, and this is what clearly concerns Washington. “Businesses interested in engaging in Iran really should hold off. The day may come when Iran is open for business, but the day is not today,” Cohen told reporters after his talks in Ankara with senior Foreign Ministry officials.

Erdogan said he would focus his efforts on expanding Turkey’s cooperation with Iran’s energy sector. “We import oil and natural gas from Iran and those are strategic products that Turkey imports from Iran and we can receive them more (than before),” Erdogan was quoted by Fars as saying, after signing the agreements. “Given the fact that Turkey’s industries are making progress on a daily basis and rapidly, we direly need energy products, specially Iran’s natural gas, and we should take joint win-win steps,” he added.

Erdogan signed three trade deals before leaving Tehran to fly home. "Today we had a good chance to review bilateral ties," Erdogan said in remarks translated into Farsi by Iranian television as it showed him meeting Vice President Eshaq Jahangiri. "It is obvious that we import from Iran crude oil and gas, which are strategic energy sources, and we will be able to increase the volume of these imports." No details were immediately released about the three trade pacts or Erdogan's meetings with Khamenei and Rouhani. 

Erdogan told reporters in Ankara before he flew to Tehran that Turkey has so far done its best in that regard and will continue to do so. 

Iran said before Erdogan’s visit that five cooperation agreements would be signed with Turkey and that the trade target between the two countries, currently $20 billion, will be increased to $30 billion as of 2015. Iran is also interested in establishing a “free trade zone for energy” within Turkey.

3. Politics 

Turkish strong man Erdogan visited Iran  to bolster trade and energy ties in what also looked like a bid to defuse tensions over Syria by capitalizing on Tehran's diplomatic opening to regional rivals and the West. 

The Middle East's growing sectarian divide, which has been fueled by the turmoil and chaos in in Iraq, Afghanistan, Pakistan and Syria, as expected by USA, puts Ankara and Tehran on opposite sides of the fence.

Iran considers itself the leader of Shiite nations just as Saudi kingdom has assumed the leadership of Sunni world. The Erdogan government stands firmly with Saudi Arabia with regard to this divide and is also supporting the Sunni opposition in Syria has been a latent point of tension between Ankara and Tehran.

Iran has been a strong strategic ally of Syrian President Bashar al-Assad since the start of the uprising against him, while Turkey has been one of his fiercest critics, supporting his opponents and giving refuge to rebel fighters. But Iran's election last June of President Hassan Rouhani, a relative moderate who says he wants to thaw its ties with the West, and shared concern over the rise of al Qaeda in Syria, have spurred hopes of a Turkish-Iranian rapprochement.

While deep divisions remain between Ankara and Tehran over the conflict in Syria, diplomats and government officials say both sides want to mend a relationship that could be pivotal to the fast-changing political map of the Middle East.

 Some sanctions that were imposed over suspicions that Iran is covertly trying to develop a nuclear weapons capability, were relaxed starting on January 20. But most sanctions, including a severe squeeze on Iran's access to the international financial system, remain in force pending a long-term agreement on the scope of Iran's nuclear program, which is to be negotiated over the next six months.

The Syria issue was the cause of some “friendly barbs” exchanged by Davutoglu and his Iranian counterpart, Mohammad Javad Zarif, during a Jan. 24 panel at the World Economic Forum in Davos. Davutoglu criticized the argument that Hezbollah was in Syria to protect Shiite holy sites only.

Ankara’s unwavering support for the Muslim Brotherhood in Egypt is another sore point with Iran. Shortly after the July coup in Cairo, Iran warned that Turkey’s support for ousted President Mohammed Morsi “would land Turkey in a crisis.” There was little love lost in Tehran over first ever democratically elected president of Egypt Mohammed Morsi when he was in power and pursued a strong Sunni line, which was reflected in Cairo’s approach to regional issues of much concern to Iran, starting with Syria.

Turkey and Iran are at odds over NATO’s US-controlled, state-of-the-art antimissile radar system, which is deployed in Turkey, targeting Iran against a possible threat from Iran. Turkey’s insistence that the system does not target Iran is not accepted in Tehran, given statements from NATO officials belying such assertions.

High-ranking Iranian military and security officials have warned Turkey on a number of occasions in the past few years of serious retaliation in the event of an attack against Iran by the United States or Israel, the presumption being that NATO’s Turkey-based antimissile system would be used in such an operation. If that happens, Iran would hit radar installations in Turkey if the USA or Israel attacked Iran. 

However, Ankara supported Iranian participation in the Geneva II talks, as Foreign Minister Davutoglu has said on a number of occasions. Davutoglu’s support for Iran in regard to Geneva II is therefore said to have as much to do with the Syria crisis as with Ankara’s desire to maintain good ties with Tehran, especially in the area of economic and trade cooperation.

As the Geneva II talks kicked off in Montreux Jan. 22, Iranian President Hassan Rouhani, whose country was not invited to the talks, said that states sponsoring what he called terrorism in Syria should stop doing so. His statement clearly referred to Turkey, given that the government-controlled Iranian media has been pointing to Ankara as one of the leading supporters of the predominantly Sunni opposition in Syria. 

Foreign policy of "prudence and moderation" being pursued by Iranian Supreme Leader Ayatollah Ali Khamenei as well as Rouhani has eased Tehran's international isolation and revived contact with longtime arch-enemy Washington. "Our relations with Turkey have entered a new phase and we hope this trend continues". 

 A joint communique said: "We have taken concrete decisions to bolster bilateral relations between the two countries. We have reached a nice agreement on natural gas exports. We hope that this will be implemented sooner. We believe that the visit by the Turkish prime minister will be cornerstone in bilateral relations and it will help improve ties between the two countries." Erdogan said: “Today we have mainly liaised on bilateral relations. A preferential commercial agreement was of utmost importance. I am very pleased to sign it."

Generally, Washington favors a Turkey-Iran rapprochement, seeing it as a positive regional development. The USA believes detente between Turkey and Iran is important to wider stability in the Middle East, a strategic breakthrough Washington hopes to achieve from talks that world powers are pursuing with Tehran to curb its nuclear program.

4.  Economics

The potential of a market of 76 million people in Iran with some of the world's biggest oil and gas reserves is a magnet for foreign investors, including Turkish companies.

Turkey’s economic and political relationship with Iran continues to expand, even as the Turkish political elite’s ties to the Iranian underworld have mired the AKP government in scandal. Iranian gold traders have been at the center of this scandal, underscoring the dangers of working with Iran’s shadow economy. 

Turkey depends on imports for almost all of its natural gas needs and the $60 billion energy bill Ankara must foot annually has been the biggest driver of its ballooning current account deficit, regarded as the main weakness of its economy. Ankara deems Iranian gas too expensive compared with other suppliers like Russia and Azerbaijan, an assertion rejected by Tehran. Turkey's Petroleum Pipeline Corporation applied to an international court of arbitration in 2012 for a ruling on Iran's gas pricing. The case is still pending.  

Turkey's prime minister visited Tehran to improve friendly relations with Iran and forge some economic agreements. 

Turkey needs Iranian energy and markets, while Iran needs Turkey to circumvent the sanctions, and they both probably decided that Syria, where their interests collide, is a secondary issue. 

 The natural gas that Turkey purchases from Iran (its second largest supplier after Russia) has led to a significant trade deficit to Turkey’s disadvantage, so Ankara wants to redress this situation by increasing its exports to Iran.

Turkey and Iran began to grow closer economically after the international community hit Iran with sanctions over its controversial nuclear program and suspicions Tehran has been trying to develop a nuclear weapon. 

Turkey is keen to increase oil and gas imports from Tehran in anticipation of sanctions against Iran's huge energy sector being dismantled in the wake of the November 24 deal between Tehran and six big powers under which the Islamic Republic committed to scaling back some of its controversial nuclear activities.

Turkey, as well as many other Western and Asian nations, is keen on tapping into Iran’s energy sector, as world powers push for a final-status deal that would ease sanctions on the country’s economy in exchange for concessions on the nuclear front. “We hope the process will be finalized with an agreement that will ensure the removal of all sanctions on Iran. Turkey has so far done its best in that regard and will continue to do so,” Erdogan said.

Iranian officials say trade between the countries stood at $22 billion (16.2 billion euros) in 2012, before dipping to $20 billion in 2013, and that it should reach $30 billion in 2015. Iran was Turkey's third largest export market in 2012. In fact, Iranian media said, Turkey exports more than 20,000 products to Iran, among them gold and silver.

 Turkey and Iran aim to more than double the current levels of trade between the countries, going from $13.5 billion (9.9 billion euros) in 2013 despite strained relations to $30 billion (21.9 billion euros) in 2015, Erdogan. Khamenei said both Tehran and Ankara were “serious” about implementing bilateral agreements. 

Erdogan's delegation repeated Turkey's demand for a discount on the price of natural gas from Iran. A senior Iranian official said that  the was discussed but further talks will take place on the issue of discount. No decision has been made yet.

Policy implications

In reply to Erdogan visit, Iranian President Hassan Rouhani is planning a visit to Turkey to further strengthen the bilateral ties in February as part of an Iran-Azerbaijan-Turkey meeting. 

All eyes are on Turkish-Iranian ties due to Prime Minister Erdogan’s two-day visit to Iran that began Jan. 28 with a view toward advancing bilateral cooperation despite serious differences on a number of issues.

This was not Erdogan's first visit to Tehran but that it came at a critical time as the two nations have fundamentally different positions on the civil war in Syria. 

Unlike other bilateral ties  that  places   military  equipment trade as their  key trade item, Turkey and Iran have not discussed that scenario. 

Turkey supports the Syrian opposition while Tehran backs Syrian President Bashar al-Assad. But despite this difference, Turkey has started to support the idea of including Iran in talks on Syria's future

Despite serious differences between Turkey and Iran in the political sphere, Erdogan’s visit nevertheless shows that it is ultimately “business as usual” between the two countries in the literal sense of the word. It is unlikely that Ankara will pay much heed to the US warning, given that Erdogan desperately needs all the foreign business Turkey can get and that is something the United States cannot provide.

Turkey, Iran grow closer as Erdogan plans visit to Islamic Republic. Turkey and Iran seem to be boosting relations as the two countries continue to exchange high-level visits.

According to Iranian media, trade between two countries now amounts to $20 billion a year. Iranian officials say they hope to increase that figure to $30 billion by 2015. 

 Despite the positive prospects for Turkish-Iranian business ties, strains over issues relating to the Middle East, especially Syria, will nevertheless remain a major thorn in the side of political relations between the two countries for the foreseeable future.

While the differences over Syria are not expected to go away, critics see a common purpose in Turkey and Syria aligning against the growing threat from common enemies. 

As Jews control the global media in English even in USA and Mideast, newspapers, banks, and ‘interest-rate lobby, Erdogan is more inclined to see Iran rather than Israel or even the West as an ideological ally because at least Iran doesn't allow its few remaining.

Undoubtedly,  the recent  bilateral developments indicate that the relations between Turkey and Iran will grow  from strength to strength.  Iran can depend on Turkey, a NATO member, to mediate with USA.