Turkey and Iran agree to strengthen economic ties

Turkey’s President Recep Tayyip Erdogan and his Iranian counterpart Hassan Rouhani have agreed to strengthen economic ties and cooperate in the fight against “terrorism”.

Their meeting on Saturday in Erdogan’s palace near the Turkish capital Ankara came a day after Iran was accused of supporting armed groups and interfering in the affairs of Middle Eastern countries, including Syria and Yemen, at a summit of Muslim heads of state in Istanbul.

Rouhani boycotted the closing meeting of the Organisation of Islamic Cooperation on Friday in protest at the rebuke.

READ MORE: Islamic leaders pledge to combat sectarianism

In a joint press conference on Saturday, Erdogan said Turkey and Iran must collaborate to narrow their differences in order to tackle violence and sectarianism in the region.

“It is above all in our own countries’ interest to strengthen our political dialogue and reduce our differences of opinion to a minimum,” Erdogan said.

“We have to work together to overcome the problems of terrorism and sectarianism and the related humanitarian crises that are shaking our region,” he added.

Boosting trade ties

Energy-hungry Turkey imports large amounts of natural gas from Iran and the two countries are looking to boost banking and trade ties, with the goal of tripling bilateral trade to $30bn annually in the coming years following the lifting of international sanctions on Tehran in January.

“The situation is ripe for cooperation between Turkey and Iran in the post-sanctions era,” Rouhani said at the news conference.

“The most important part is closer ties between banks and credit lines. We decided to improve banking relations.

“Turkish banks can now establish branches in Iran to help facilitate economic relations between the two countries,” he added.

Despite their rapprochement, Turkey and Iran remain on opposing sides of several fronts, including the civil war in Syria.

Both countries have found an area that they can agree on – and agree upon strongly. They see that there is mutual benefit in increasing trade ties, promoting tourism and even have some sort of cultural cooperation.

Turkey hadn’t signed up to some of the sanctions that were imposed on Iran prior to the nuclear deal – a lot of the money that was going into Iran was going there through Turkish banks – and it doesn’t want to lose that trade now, particularly because the Turkish economy domestically has been stuttering in the past couple of years.

President Erdogan and his party need to rejuvenate that economy if they are to regain the popularity that they’ve had before.

From an Iranian perspective, they sit on opposite ends with Turkey on several issues – not least the war in Syria, so to focus on an area that they can agree on will detract from maybe some of the areas that they disagree on.

Particularly, that Iran is one of the closest – if not the closest ally of Russia – in the region, and Russia is obviously still on very bad diplomatic terms with Turkey.

The elephant in the room was the war in Syria; it wasn’t really discussed, bar few passing comments by President Rouhani where he said that each country had to respect the people’s will to choose their leadership and that they should oppose any foreign interference. 

That’s something that a lot of critics will pick up on because actually the Iranian Revolutionary Guard and a lot of Shia militia coming from Iran have been fighting alongside the Syrian army.

Military analysts will point to the fact that probably was it not for Iran’s military support in Syria, Bashar al-Assad’s regime wouldn’t still be around – it definitely wouldn’t be as strong as it is now.

So, there are still severe disagreements between the two countries, however they have found from a money perspective – and they say money talks – business ties that can maybe bring the two countries together.