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Syria divisions aside, Turkey eyes closer ties with Iran

By REUTERS

MARCH 4, 2016 18:13

The first visit by a Turkish prime minister to Iran in two years is unlikely to narrow deep divisions over Syria's war, but it could boost trade ties as the lifting of sanctions on Tehran and political gains by reformists clear the way for a business boom.

Turkey, the region's economic powerhouse, could be one of the major beneficiaries as President Hassan Rouhani, bolstered by reformist gains in elections last month, pursues plans to strengthen the private sector and welcome foreign investors.

Trade and energy ties will be high on the agenda during Turkish Prime Minister Ahmet Davutoglu's visit on Friday and Saturday, accompanied by his energy and development ministers, other members of the cabinet and business leaders.

But differences on Syria, where Shi'ite Iran backs President Bashar Assad and Turkey backs the mainly Sunni Muslim opposition, will also be on the table, officials on both sides said. Iran is also concerned by Turkey's deepening ties with Saudi Arabia, with which Tehran has cut diplomatic relations.

"We are in an environment of very big and deep problems with developments in the Middle East ... It wouldn't be right to expect the two countries to agree on every subject," said a senior Turkish government official, one of several to speak about the visit in advance on condition of anonymity.

"We don't expect to solve everything in one meeting but it's now necessary to move our relationship forward ... Regional issues, notably Syria, increasing trade and cooperation will form the basis of the discussions."

Turkish trade with Iran reached around $22 billion in 2012 before dropping off sharply to less than half that by last year as international sanctions on Tehran were tightened. Turkish Economy Minister Mustafa Elitas told Reuters last month that Ankara aims to reach $30 billion in bilateral trade by 2023.

"Iran presents serious opportunities, they're extremely open to future cooperation," said a source in the Turkish automotive industry who has made several recent visits to Iran.

"There's huge appetite for Turkish business. It's a neighboring country where Turkish is widely spoken, with a similar culture. It's very easy to engage with Iranian business," he said, adding there were already signs of movement on industry reforms since the Feb. 26 election.

The vote ended more than a decade of conservative domination of the legislature and the Assembly of Experts, a body that oversees the Islamic republic's supreme leader. The outgoing parliament, filled with hardliners suspicious of detente with the West, had acted as a brake on Rouhani's plans to boost foreign investment and trade.

"Iran is a very attractive market for Turkish businessmen and ways of developing trade will definitely be taken up during the visit," a senior Iranian official said.

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