Iran willing to take steps to improve trade with Azerbaijan

Business Materials 14 November 2015 18:52 (UTC +04:00)

Tehran, Iran, November 14

By Mehdi Sepahvand, Temkin Jafarov -- Trend:

Iran is willing to take steps to improve trade with neighboring Azerbaijan, in a bid to make up for a recent decline in turnover between the two countries, said Mohammad Ali Najafi, governor-general of the Iranian border province of Guilan.

The governments of the two countries are constantly holding meetings and agreements are being signed to improve the situation, Najafi told Trend November 14.

Najafi was the speaker at last week's second joint seminar between Iran and Azerbaijan, which hosted ambassadors and governors from both countries.

He said that since coming to power, the Rouhani administration has been seeking to build stronger ties with Baku.

The official noted that Iran has unilaterally waived visa requirement for Azerbaijanis, since 2009, in a move to show that Tehran is looking forward to more intimate relations with Baku.

The Iranian government is also making attempts to operate customhouses around the clock at the border with Azerbaijan, so as to help the movement of passenger and goods between the two countries, Najafi stated.

"We are also emphasizing border markets. Opening a very modern border market with Azerbaijan is on the agenda. Last week, the Iranian cabinet passed a regulation which emphasizes attendance to border markets," he noted.

There is also discussion about building an Iran-Azerbaijan railroad, he said.

Towards the west of the Caspian Sea, the North South corridor starts from Russia, passing through Azerbaijan to the Astara checkpoint, from where it is expected to connect to the Gazvin-Rasht-Astara railway project in the future.

The Qazvin-Rasht-Astara railway is part of the North-South transport corridor. Construction investments are estimated at $ 400 million. At this initial stage, plans call for transporting 6 million tons of cargo per year, increasing to 15-20 million tons per year in the future.

During an October 10 meeting, Azerbaijan and Iran agreed to establish a joint working group to discuss actions for linking railway lines as part of the North-South Transport Corridor and the creation of appropriate infrastructure along the two countries' border.

The agreement was reached at a meeting between Azerbaijan's Economy and Industry Minister, Shahin Mustafayev, and Iran's Communication and Information Technology Minister, Mahmoud Vaezi, in the Azerbaijani city of Astara.

Najafi went on to say that he regrets that there are a number of obstacles that, if eliminated, would greatly contribute to mutual trade between Iran and Azerbaijan.

Heavy tariffs of Iranian goods has caused Iranians to export goods to Turkey and, from there, to Azerbaijan, rather than directly to Azerbaijan, which is an area that could see improvements, he stated.

Also, Iran has been unable to use international systems for money transfers, which is a problem set to be lifted soon after sanctions are removed, the official noted.

Under international sanctions, Iran has been unable to transfer money using the SWIFT banking system. The country, however, is expected to be freed from sanctions in the coming months, following the signing of a comprehensive agreement in July.

Further, launching a regularly scheduled flight from a city such as Guilan, Rasht or Astrakhan to Azerbaijan would also be of great help, Najafi said.

Of course, both countries have suffered a decline in oil revenues due to international oil price reductions, which has also had a hand in lowering mutual trade, he noted.

The official also said that he will visit Azerbaijan on November 15, heading an economic delegation, to discuss steps that might improve mutual trade.

"In the coming weeks, there is going to be an Iranian construction, energy, and engineering service exhibition in Baku, in which 20 out of 37 Iranian companies attending the show will come from Guilan," he said, noting that the province has great industrial capabilities in the cement, petrochemicals, radiator, cellulose, and other industries.

"Also, Iran has significant infrastructure in the tea and tea processing industries. We have heard that there have also been some recent improvements in Azerbaijan's Lankaran in the tea industry. Therefore, there are great cooperative opportunities in that area, as well."

"In past years, Iran had a ship, called Mirza Kouchak Khan, travelling between Iran and Azerbaijan. That was a very good experience and it was quite upbeat, as many people used it for tourism, commercial, and other purposes. But as the ship grew old and was put aside, no attempt was made to replace it and keep the line open. Right now, the Anzali port city in Guilan has a very modern and well-equipped terminal which can host passenger and cargo ships from abroad," he noted.

Azerbaijan and Iran have had diplomatic relations since 1918. Iran recognized Azerbaijan's independence in 1991 and diplomatic relations between the two countries were reestablished in 1992.

Currently, the two countries are focused on expanding economic ties in various fields, including industry, agriculture, energy and transportation.

Iranian exports to Azerbaijan during the first half of 2015 decreased 55.36 percent to $42.52 million year-on-year. Azerbaijan's exports to Iran also decreased 67.11 percent to $11.16 million during that period.