TEHRAN Deputy Commerce Minister Mojtaba Khosrotaj here on Sunday outlined main structural barriers in the way of the entry of Iran into Latin American markets and analyzed the prospects of Iranian exports to that region.

Addressing a seminar on expansion of ties with Latin American countries, he said that in the past two decades, the general trend in the Latin American countries as well as in many other parts of the world has evolved around various policies including privatization, deregulation, trade liberalization, unionism and regionally-oriented trade and attraction of and support to foreign investment, IRNA reported.

Although these policies could have provided some favorable opportunities for the export of Iranian goods to Latin America, the fact is that the developed and far-advanced countries of the region enjoying more progressive trade structures, easier flow of foreign investment, considerable political influence and common cultural and social backgrounds, the trade opportunities of the region have titled more toward the more advanced countries of the continent and the neighboring countries, eventually helping the creation of such trade unions as NAFTA and the establishment of preferential tariffs systems among them and finally advancing their membership in the World Trade Organization, he said adding that under such circumstances, Iran's rivals got the upper hand and its products were denied the power of competition.

The geographical distance between Iran and the markets of Latin America referred to as the "friction of distance" which leads to greater transportation costs, longer periods for shipment and their consequences are yet another fundamental impediment, he said adding that the problems arising from this impediment become more evident specially when it comes to resource-based industries that are prevalent in Iran.

Under such circumstances, Iran's relative advantages in certain areas of production loses their strength vis-a-vis other components of the chain of their enterprise values, he said stressing that in such circumstances, Iran's products become uncompetitive, specially taking into account the consumer prices in the markets of Latin America.

Preferential tariffs as well as high tariffs in such big-market countries as Brazil combined with nonpresence of Iran in the world sales and marketing networks make Iranian exports lose their attraction even when the consumer price against all overhead exports lost may initially point to profitability.

The arrival of new rivals such as China, Turkey and East European countries with their high quantity production, cost-benefit operation and often their struggle for survival add to the already gloomy environment, Khosrotaj said.

Certain other structural ills of production and export in Iran in addition to the financial and human resources and operational weaknesses of the Iranian manufacturing firms all tend to worsen the prospects.

Trade liberalization, reduction of tariffs, reduction and elimination of non-tariff barriers, privatization and deregulation that have been followed in the majority of the countries of the American Continent have produced both promising and threatening opportunities for the manufacturing companies in many parts of the world, he said adding that in the case of Iran, these opportunities have become threatening, creating even more serious impediments in the way of Iran's entry into the markets of Latin America.

Trade figures show that Iran's exports to that continent has been limited to petrochemical products, handmade carpets, and certain dried fruits, he said noting that the export of other items is trivial and this situation is a reflection of the conditions prevailing in Iran enterprises at national and global level.