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EghtesadOnline: A food industry guild association has called on German firms to create a mechanism for trade with Iran to help mitigate the impact of tough United States economic sanctions.

In a meeting with a German economic delegation in the German-Iranian Chamber of Industry and Commerce on Wednesday, Kaveh Zargaran, secretary of the Federation of Iranian Food Associations, expressed the hope that Germany could support Iran in the present trying times by setting up a trade mechanism, which in turn can also help safeguard and promote Germany’s share in Iran’s market. 

The US administration is playing a dangerous and destabilizing role in creating the present chaotic conditions, he said. “This is neither in the interest of Iran nor the western world,” the official federation website reported him as saying. 

Zargaran argued that US pressure would eventually bring Iran closer to China and Russia despite the fact that Iranians are more inclined toward economic interaction with Europe, Financial Tribune reported.

After pulling out of the historic nuclear deal in May 2018, the US administration reimposed economic sanctions on  Iran undermining normal trade and banking ties between Iran and the world. 

Zargaran recalled that German industries have always been held in esteem in Iran, noting that “if it was not because of the sanctions Germany would have been Iran’s first trading partner.” 

He concurred that depleted machinery and equipment plus low industrial productivity in Iran have limited the country’s economic growth. “Lack of comprehensive plans to renovate industrial machinery and expand production infrastructure has further jeopardized growth.”

Building mutual economic and political ties can contribute in developing Iranian infrastructure in the short-term and by extension pave the way for decent economic growth rates, the joint chamber official said. 

Germany, France and the United Kingdom (E3) are working on a trade mechanism, known as the Instrument in Support of Trade Exchange (INSTEX), to circumvent US sanctions and facilitate non-dollar trade with Iran. 

An increasing number of businesses, impendent experts and senior officials have expressed serious reservations about the effectiveness of INSTEX the implementation of which has been delayed several times. 

Some observers say the so-called E3 is wasting time and is incapable and unwilling to go against US sanctions fearing a backlash against their own companies wanting to trade with the US market that is much bigger and more lucrative than the Iranian market of 80 million people.

 

Iran economic sanctions food industry German Firms Trade With Iran