Czechs look to Iran opportunities, but trade promotions office still under discussion

Tehran, photo: Amir1140, CC BY-SA 3.0 Unported

After nine years of United Nations sanctions, Iranian celebrations at the news of a negotiated deal over the country’s nuclear development which might bring them to an end were hardly surprising.

Tehran, photo: Amir1140, CC BY-SA 3.0 Unported
Imports of many basic goods to Iran have been curtailed over the last years with the sanctions hitting spare parts for energy installations, cars, aircraft, and more basic goods. Some of the curbs could be got round through middlemen, but at a high price. Sales of oil and gas, Iran’s main assets, were curbed. Overall, its estimated that the sanctions have curtailed Iran’s economic growth by around 25% over the last nine years.

The reopening of Iran and its market of around 80 million is likely to benefit Europe’s biggest countries the most, Germany, France, and Italy are tipped to provide much of the machinery, engineering, cars, and industrial goods that have been blocked or got through with difficulty.

But the Czech Republic also has a strong case, according to industry and trade minister Jan Mládek, to win back some of its former markets for transport infrastructure, textile machinery, engineering goods, and energy infrastructure. Some of the potential of the Iranian market has already been mapped out by CzechTrade’s existing office out of Dubai in the United Arab Emirates. A Czech business delegation visited Iran in September last year. A handful of Czech companies also attended a construction fair in Iran this June.

Europe’s big players already have their appetite whetted for the trade deals that could be coming with a bit of ministerial muscle and glad handing. Germany’s minister for economy and trade, Sigmar Gabriel, boarded a plane for a three-day trade exploration trip to Tehran almost as soon as the nuclear deal was sealed. French foreign minister Laurent Fabius is expected to visit on July 29.

The Czech Ministry of Trade and Industry announced its intention July 21 to examine the possibilities of opening a new CzechTrade office in Tehran. The idea though had to be discussed with the Ministry of Foreign Affairs, the partner in most initiatives regarding so-called economic diplomacy, on July 22. Those initial talks did not bring a clear result, according to the Ministry of Industry and Trade. Further discussions will be held, the ministry spokesman added on July 28, without giving a clear timeline for an expected result.

The Ministry of Industry and Trade argues that its trade boosting offices are overall a good investment. Their overall running costs are around 150 million crowns a year and in 2014 they mediated export deals amounting to 6.8 billion crowns.