Iran, UAE activate business council

The UAE Ministry of Foreign Affairs and International Cooperation announced on its website that the Iran-UAE Business Council held its first meeting in Tehran, the Iranian capital, on the sidelines of the Iran Expo from May 7 to 10.
The UAE side is chaired by Abdullah Mohammad Al Mazrouei, Chairman of the UAE Chamber of Commerce and Industry and Chairman of the Abu Dhabi Chamber of Commerce and Industry. The Iranian side was headed by Mehdi Safari, the deputy foreign minister in charge of economic and foreign affairs, and many business leaders from both sides participated.
In his inaugural speech, Al Mazrouei praised the efforts of the organizing committees of both parties to establish and launch the council, which will greatly promote the cooperation between the business circles of the two countries.

He said that the establishment of the Iran-UAE Business Council comes at a time when the bilateral relationship is witnessing economic growth, presenting an important opportunity for the private and public sectors of the two countries to further strengthen trade, investment and economic ties.
“The UAE believes that the Business Council will be an important platform to further strengthen the partnership between the UAE and the Iranian business sector,” he said.

Al Mazrouei emphasized that the establishment of the business council “reflects the mutual desire to strengthen and elevate economic and trade cooperation between the two countries to a new level, while expanding the participation of the UAE and Iranian business communities.”

He explained that bilateral economic relations continued to develop in various fields, noting that economic cooperation in these fields has increased trade and investment flows.
During the meeting, Safari expressed appreciation for the presence of the UAE delegation and for coordinating the inaugural meeting of the Council in Tehran, an important step in strengthening bilateral economic relations. He pointed out that the meeting will create an environment for consultation and exchange of views on issues serving the business communities of the two countries.
The UAE economic delegation, including representatives of different entities, held a series of meetings with officials from different Iranian economic agencies and ministries.
The Iran-UAE Business Council was established under a Memorandum of Understanding signed in 2014 between the Federation of UAE Chambers of Commerce and Industry and the Iranian Chamber of Commerce, Industry, Mining and Agriculture. It aims to explore avenues for mutually beneficial economic opportunities for both parties in a range of sectors including food, health and tourism. The council also provides a platform for senior business leaders from the UAE and Iran to foster business partnerships.

major trading partners

The UAE is Iran’s largest exporter as it sold goods worth $18.39 billion to Iran in the 2022-23 fiscal year, an 11 percent increase from the previous year.
The Arab country is also a major destination for Iranian exports. It ranks fourth on the list of top Iranian export destinations for the 2022-23 fiscal year at $5.76 billion, up 28%.
Iran recently stated that it has appointed an ambassador to the United Arab Emirates for the first time since 2016 in response to the adjustment of relations between the Persian Gulf countries and Iran.
The move comes after the UAE upgraded relations in August 2022 and said it would return its ambassador to Tehran, according to Reuters.
The UAE downgraded ties with Iran after Saudi Arabia severed ties with Iran in January 2016 after Iranian protesters stormed the Saudi embassy in Tehran following the execution of a prominent Shia cleric in Riyadh.
The UAE’s commercial and trade ties with Iran date back more than a century, and the country began re-engaging with Tehran in 2019. Its emirate of Dubai has long been one of Iran’s main points of contact with the outside world.
Iranian state media said Iran’s newly appointed ambassador, Reza Ameri, had previously served as director of the Foreign Ministry’s Office of Iranian Diaspora.
At a time when the global situation is seriously tense, good news has come from the Persian Gulf region recently. Under the mediation of China, Saudi Arabia and Iran have reached a bilateral agreement. According to Gulf News, Ali Shamkhani, secretary of Iran’s Supreme National Security Council, then visited the UAE, and the head of the Iranian parliamentary delegation held talks with senior Bahraini officials.
Statements by officials from Persian Gulf Arab states and Iran underscored the importance of economic, trade and investment cooperation in ongoing rounds of talks between the two sides.
Regarding the Saudi-Iran deal, UAE National Security Adviser Sheikh Tahnoun bin Zayed Al Nahyan said, “The deal plays a constructive role in expanding peace, stability and sustainable security in the region. sexual role”, adding that “the development of friendly and brotherly relations between Abu Dhabi and Iran” and Tehran is one of the UAE’s priorities. “
Ali Shamkhani stressed that cooperation and reconciliation must replace differences and enmity.
The composition of the delegation to the talks, which included the governor of the Central Bank of Iran, indicated that economic and investment issues took center stage in the talks.
Iran’s first trade center licensed by the Iran Trade Promotion Organization will be inaugurated in Dubai in 2021.
As reported by the Iranian Chamber of Commerce, Industry, Mines and Agriculture, the center will help Iranian companies find a foothold in the UAE, especially in Dubai, which happens to be one of the main hubs for Iranian trade in the region.
It also seeks to use advanced information technology to create a platform to facilitate the business activities of Iranian companies in the UAE market by providing technical advice and advisory services.

Despite great potential, trade relationship has flaws

Farshid Farzanegan, former chairman of the Iran-UAE Chamber of Commerce, said that despite the UAE’s importance in Iran’s foreign trade, the two neighbors have yet to sign a preferential trade tariff agreement.
“Due to the geographical, cultural, trade and historical relationship between Iran and the UAE, as well as the annual import volume [from the Emirates]that country provides opportunities for Iranian companies,” Fars news agency quoted him as saying.
“This Arab neighbor plays an important role in international trade and global value chains.”
Farzanegan, who sits on the board of the United Chamber of Commerce, said that from the 2010-11 fiscal year to the 2018-19 fiscal year, the average annual trade between the UAE and Iran was $13 billion. China is $13 billion, South Korea is $5.5 billion, Turkey is $5.5 billion, and Iraq is $5 billion.
Iranian exports to the UAE include vegetables, lead, melons, grapes, spices and cement, each of which accounts for nearly 10 percent of the UAE market.
Pointing to banking and remittances as the main constraints on two-way trade, Farzanegan said insurance coverage for bilateral trade is insufficient.
“It is impossible for a trader to open a letter of credit. The lack of consortiums that export technology and engineering services is another issue. This is in the context of a solid trade infrastructure in the UAE. So to develop trade with this country, we have to upgrade and Develop our infrastructure. Iran’s geopolitical and geoeconomic advantages allow the transportation of goods from Turkey and CIS countries to the UAE,” he said.
In November 2021, the first cargo from the port of Sharjah in the UAE to the port of Mersin in Turkey docked at the Shahid Rajai port in Iran, and then arrived in Turkey through the Bazargan border in northwest Iran, passing through Iran’s UAE- Turkish transit corridor started operations.
Mohammad Hossein Rezaan, an expert on transit trade, told the Mer news agency that the cargo entered the port of Shahid Rajai in southern Iran along the coast of the Persian Gulf and arrived at the port of Mersin in Turkey.
The new route cuts transit time by 12 days, meaning it takes eight days for cargo to travel from Sharjah to Turkey via Iran. In the past, ships had to cross the Bab al-Mandeb Strait, the Red Sea and the Suez Canal to reach Turkey after 20 days.
Noting that the UAE has zero tariffs on imports of almost all goods, except for Iranian cement, which is 5 percent, Farzanegan said it was crucial for Iran to have a preferential tariff agreement with the UAE to boost trade.
Iran’s import tariffs are among the highest in the world, with tariffs on some commodities as high as 40%.
“We don’t have a preferential tariff agreement with any country. There is an agreement with Turkey and there are negotiations with Pakistan,” he added.
During the recent visit of Minister of Industry, Mines and Trade Reza Fatemi-Amin to the UAE, the two sides discussed the prospect of implementing preferential trade and tariffs. However, an agreement is pending.