Britain’s biggest trading rivals in Europe have wasted little time in gaining a head start in the race to win billions of pounds worth of business in Iran.

With the ink barely dry on the historic agreement between the Islamic republic and the 5+1 group powers of Britain, the U.S., Russia, China, France, and Germany, our competitors in Paris have already started a charm offensive to secure deals.

French Foreign Minister Laurent Fabius was in the Iranian capital this week with an invitation for President Hassan Rouhani to visit Paris in the winter.

He told guests gathered at the French embassy in Tehran: “We are two great, independent countries.”

“With the new deal, the lifting of sanctions, France intends, if Iran is willing, to be more present in several areas,” said Mr. Fabius. Business and trade will be at the top of the list as French companies hope to gain a head start in signing lucrative contracts with their Iranian counterparts.

Following in the footsteps of Mr. Fabius, his deputy and France’s agriculture minister will lead a major trade delegation to Iran in September. French companies such as Total, Peugeot, Renault and Carrefour have previously had a significant presence on the ground and in theory would hope to do so again.

Despite the wooing of Iran by the French government, the country’s exporters won’t necessarily find it easy to regain a foothold in the Islamic republic. Peugeot’s chief executive has already highlighted the hurdles that must first be overcome due to anti-French sentiment in Iran but at least the government in Paris has got on the front foot and opened a dialogue.

And it’s not just the French who are now travelling the route of the old Silk Road back to Persia. German companies and trade bodies have wasted no time in rebuilding bridges with potential partners. A large German trade delegation of around 100 companies is understood to have visited Tehran even before a deal with world powers was agreed.

German Economy Minister Sigmar Gabriel traveled to Tehran as Berlin hopes to pave the way for the country’s large exporters such as Volkswagen, Daimler, Siemens and BMW, which have expressed an interest. Deutsche Bank has said that if German trade with the Islamic republic was to return to levels seen before sanctions then the European powerhouse could see up to €4.5bn (£3.1bn) in additional revenue.

By comparison, the British government appears to be in a state of denial over the implications for trade which may arise from the historic deal signed last month to lift sanctions and curtail Iran’s nuclear program.

Although the government is reluctant to act before the International Atomic Energy Agency (IAEA) has checked that Iran will comply with its nuclear commitments agreed in Vienna, business is not. British companies, especially in the oil and gas sector, are aching to get back in. Royal Dutch Shell has already held talks with Iranian officials about the way forward and BP chief executive Bob Dudley spoke at length about the importance of Iran during the company’s earnings briefing last week.

Both UK oil giants have a long history of involvement with Iran and neither can afford to be left behind in the race to secure access to some of the world’s last remaining cheap oil and gas. However, their major French rival, Total, may have already stolen a head start. The oil giant’s chief executive, Patrick Pouyanne, will have been buoyed by the remarks of Iranian Oil Minister Bijan Zanganeh following his meeting last week with the French foreign minister.

Following the discussions, Mr. Zanganeh said: “A new chapter of cooperation with the French company Total will begin to develop Iranian oil fields.”

He added: “Total was active in developing Iranian oil projects for more than 20 years (before sanctions) … the door is again open for this company’s activities in developing oil fields.”

However, British business won’t receive any diplomatic help to re-establish their position until the government is entirely confident that Iran has gone beyond the point of no return in terms of its nuclear program.

The Foreign and Commonwealth Office said in a statement: “If Iran adheres to its commitments under the comprehensive deal and sanctions are lifted, then the UK government will help business take advantage of the opportunities that arise. Until the IAEA has verified Iran’s actions on its nuclear program, sanctions will remain in place, and we will continue to enforce them rigorously.”

(Source: telegraph.co.uk)


HIGHLIGHT:

UK companies are already falling behind French and German rivals to enter Iran as European governments launch charm offensives in Tehran