UAE not seen a major trade partner for post-sanction Iran

January 9, 2018 - 18:41

TEHRAN- The United Arab Emirates (UAE) benefited a lot from years of the West-led economic sanctions against Iran as the neighbor country had turned into a number one trade partner of Iran through acting as a broker buying products and services from different countries and selling them to Iran.

But the Arab country is not seen a major trade partner for Iran in the post-sanction era as Iranian economy has opened its doors to the global markets.

Mohammad Lahouti, the head of Iran Exports Confederation, said on Monday: “We had noticeable trade with the UAE and it was a proper partner for us during the sanctions, but in our foreign trade during the first nine months [of the current Iranian calendar year (March 21-December 21, 2017)] the highest fall has been in our trade with the UAE due to several reasons including the political one and also our post-sanction [economic] condition. During the sanctions time, the UAE played the role of a dealer, many goods were not transported to our ports, they were shipped to the UAE’s ports and from there they came to Iran. We could not purchase many products due to the sanctions, so we provided them from this country.” 

“Following the implementation of Joint Comprehensive Plan of Action (which lifted the sanctions against Iran in January 2016), it is natural that a country, which as a neighbor used to play a dealer role between Iran and the other countries, now is a less important partner, as the other countries have come, like South Korea, which did not make any deal with Iran during the sanctions, while it is now among the first five trade partners of Iran. And also Germany, which was not even among the ten trade partners of Iran in the sanctions time, is now among the five top European countries from which we are importing products”, he explained.

“Meanwhile, we experienced over hundred percent growth in trade with Europe after the sanctions”, Lahouti added.

Another reason for adopting a less significant trade approach toward the UAE is the way that the Arab country is treating with Iranian traders, for example not offering banking services to Iranians as Emirates NBD, one of the largest banking groups in the Middle East in terms of assets, closed Iranian bank accounts in last November. There are also difficulties with visa issuance. 

Taking all these factors into account, Iran’s trade shifting from the UAE to another neighbor like Oman, with which Iran has a proper geopolitical relation, makes sense.

Gholam-Ali Faroghi, the chairman of Agriculture and Food Industries Committee of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA), says: “If the necessary process is defined and the proper ground is provided, I definitely hope that this shift will be very good.”

“While our trade transactions with the UAE had benefits for us during the sanction time, highlighting the role of a regional rival is not a correct approach now”, he comments.