Large Italian Trade Delegation in Tehran

Date: 27 November 2015 - 21:19

News ID: ۲۱۰۴۲

ROME (Dispatches) -- Italy is poised to send a large trade delegation to Iran at a time when heightened anti-U.S. sentiments in the Islamic Republic is raising doubts about post-sanctions opportunities for American businesses — potentially opening doors in the $400 billion economy for Tehran’s historic European partners.
Some 300 delegates from five sectors — medical, green energy, automobiles, construction and manufacturing equipment — are scheduled to arrive in Tehran on Saturday for a three-day visit to meet senior officials and business figures, Riccardo Monti, president of the Italian Trade Commission, said.
Representatives from Danieli, the steel group, energy company Enel, agricultural machinery maker CNH Industrial, Telecom Italia and several banks would be among the delegates, Monti said.
Tehran has hosted a number of European trade delegations since July, when it signed a landmark nuclear deal with major world powers — the U.S., UK, France, Russia, China and Germany. The agreement is expected to lead to the lifting of economic sanctions in the first half of next year.
Some older U.S. sanctions will remain once the nuclear-related curbs are lifted, creating uncertainty among U.S. companies and those with U.S. interests over potential action if they do business with the Islamic Republic.
Meanwhile, Iranians opposed to U.S. policies are worried that Washington will seek cultural and political influence in the wake of the nuclear deal. A fast-food restaurant advertised as a KFC outlet and seen as symbolizing U.S. culture was shut down earlier this month, and Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei warned of "unbridled imports, especially imports of any American consumer goods after the lifting of sanctions”.
The likely absence of U.S. companies opens the way for European rivals to step into the gap.
Many companies in the Italian trade delegation had no U.S. interests and were free to do business with Iran once nuclear sanctions were lifted, said Monti. But half had U.S. exposure and so were "more careful and are on a purely exploratory mission”.
Nonetheless, Italian exports to Iran, which totaled 1.2 billion euros in 2014, could rise to 2 billion euros as soon as next year, he said.
Iran’s untapped market of 80 million people represents a big opportunity for Italy at a time when it is struggling to boost exports. But some Iranian businesspeople complain that many European countries, hit hard by the credit crunch in the global financial crisis, see Iran as an export destination rather than a market for investment.
The big European banks are not expected to offer financing to potential investors even when sanctions are officially lifted, until they are certain the U.S. is fully on board.
"Finance is a problem,” acknowledged one European businessman. "But we can secure funds in other ways, such as joint ventures with the Iranian expatriate community, which has a lot of money. Iran also needs to resort to the world’s debt market.”
For now, Iran hopes small European banks such as those in Germany and Italy will compensate for the absence of the leading lenders.
And despite the business community’s wariness, Iran’s economy — the region’s second-largest after Saudi Arabia — is a tempting prospect for Italy, one of Iran’s biggest trading partners in the years before the sanctions regime. "Now,” said Monti, "we need to recover some of the lost time.”