EU Foreign Ministers Delay Decision on Iran
The foreign ministers of the
European Union (EU), meeting in Finland on September 1 to consider Iran's August
22 response to the proposal by the Group of 5+1 and its defiance of the
Security Council's deadline to stop uranium enrichment by August 31, decided to
delay any decision on sanctions until EU foreign policy chief Javier Solana has
further talks with Iran. The indecision within the EU reflects the conflicts of
interest within the EU and between the EU and the United States over Iran.
While the United States, which has
had its own sanctions in place against Iran since 1979, has virtually nothing
to lose commercially, the same is not the case with the EU. On the same day
that EU foreign ministers were meeting, the German news agency Deustche Welle reported that Germany's main trade group, the
German federation of chambers of commerce DIHK, said that Germany could lose
10,000 jobs if the UN Security Council imposes economic sanctions on Iran.
"Economic sanctions against Iran would not solve political problems, as
the example of Iraq has shown dramatically," it said in a statement. It
continued: "The German economy would be severely hit in an important
growth market. The loss of business in Iran could threaten more than 10,000
jobs in Germany."
The conflict over the Iran nuclear
issue has already generated a climate of uncertainty in Germany, the federation
argued. German exports to Iran fell by 10 percent in the first six months of
the current year. The DIHK said that around 50 German companies have branches
in Iran and more than 12,000 firms have representatives there. Iran was the
biggest market in the Middle East for German exports in 2005, ahead of the
United Arab Emirates and Saudi Arabia. Germany exported goods worth more than
4.4 billion euros (US$5.6 billion) there in 2005.
In terms of the EU's total world trade Iran ranks as its 24th largest
trading partner, whereas the EU is Iran's main trading partner, followed by
Japan, China, South Korea, Turkey, United Arab Emirates, South Africa, Russia
and Singapore. In 2004 Iran's main suppliers were the EU , China, United Arab
Emirates and South Korea, while its main export markets were the EU, Japan,
China and South Africa. EU exports to Iran have almost doubled since 1999. The
top ten countries for Iran's exports are the United Arab Emirates, Germany,
Italy, Turkey, India, Azerbaijan, Turkmenistan, China, Singapore and the
Netherlands.
The EU exports to Iran are quite
concentrated in three main products, with machinery and transport equipment
two-thirds, while manufactured goods and chemicals and related products make up
approximately 10 percent each. Iran is
an important destination market for EU's iron and
steel as well as power generating machinery. More than 80 percent of the EU
imports from Iran are energy related (mainly oil products), representing 3.9
percent of the total EU imports in energy products. Iran ranks as the sixth largest
supplier of energy products to the EU. Agricultural imports amount to 4.9
percent of total imports.
The Council of the European Union agreed in June 2002 to open negotiations with Iran. These will cover political issues as well as a trade and co-operation agreement. Such an agreement should, once concluded, put Iran's trade and co-operation relations with the European Union on a contractual basis. The negotiations were launched in Brussels in December 2002.