Lack of Strategic Business Partners
Iran has many business partners, but does not have a strategic
business partner. In the international jargon, business partner
refers to a country that has business relations with us.
Dr. Pedram Soltani believes that the level of authority and power of our
government in diplomatic engagements with the world is lower than the usual
limits of other countries. The government is engaged in diplomatic
interactions with its hands tied. See what happened to the JCPOA (Joint
Comprehensive Plan of Action)!
Soltani who is Vice President of Iran Chamber of Commerce, Industries, Mines
and Agriculture (ICCIMA), says all the roads lead to political impasse.
“From every direction we want to examine the causes of our failures in the
economic arena, we see the footsteps of wrong policies. The same policies
which must serve the economy for many years now have backfired and harmed
the economy. It now seems to be the time to take some firm decisions in this
area to bring about change in the economic policies of the country through a
broad consensus among various institutions.
“We failed to work with our neighbors and join them in a strategic agreement
and constructive, long-term economic engagement. As long as we do not change
the political approaches of the country, we cannot hope to improve the
situation; our political approaches have shown that we have not been able to
maintain the stability of our relations with the neighboring countries and
the world; there is hardly any country in our neighborhood to have
maintained a stable and progressive economic relationship in the past
decade. The world says I give you a point, and you give me a point, but we
want them to give us concessions without compensating; this is not the way
to enter into regional and international business agreements.
Why Iran has no business partner?
Iran has many business partners, but does not have a strategic business
partner. In the international jargon, business partner refers to a country
that has business relations with us. We work with neighboring countries such
as China, India, and Europe, as well as many other countries, and they are
listed in our annual foreign trade statistics, or are present in our other
economic interactions. Our problem is that we have no strategic business
partners; countries with which we could define long-term business and
economic interests and maintain convergence and synergy in our business
interests. Furthermore, the weight of our business interactions with these
partners should be to a degree that political considerations would not
undermine and marginalize it. This is our problem!
Then why Iran has no strategic partners?
Unfortunately we are not part of any serious and strategic regional and
international business or economic agreements. Defining common strategic
interests or the framework for these strategic interests in the first place
requires effective and durable bilateral and multilateral agreements, while
engaging in sustained and constructive interactions with these countries in
political engagement. This is not the case, and we are nominally in a number
of agreements, such as “ECOTA”(Economic Cooperation Organization Trade
Agreement), the “D-8” Agreement or deals with Islamic countries. These
agreements are symbolic and none of them have been enforced partly due to
conflict of interests among the countries .These agreements are formal and
mostly politically motivated.
The question that follows is why so far we have not concluded any effective
What happened to us after the (1979) revolution is that in a certain period
in order to safeguard the revolution and maintain new frameworks it was
natural to enter into bilateral suspicion with many countries, from the
United States to Europe and neighboring countries. At different junctures
other countries and basically the influential countries developed strategic
conflict with our country for various reasons in the political arena. Both
sides were guilty but in my opinion we were guiltier because we were
skeptical of almost everything or were extremely political-minded which
prevented us from improving interactions and constructive economic relations
with these countries.
The first point to note is that the level of power and authority
of our government in diplomatic engagement with the world is
lower than the standard of other countries.
In some cases, due to this approach and perspective, we made strategic
mistakes like the question of our accession to the World Trade Organization.
We were among member states which joined the General Agreement on Trade and
Tariffs which is the mother of WTO. If we had kept moving in the same
direction, we could have been among the WTO founding members but this
suspicion and this false international strategy made us miss this golden
opportunity. Now we have been waiting behind the WTO doors for long years
and have deprived ourselves of many rights, including privileges and
benefits of easier and cheaper interaction with other countries. As the
largest economy that has not yet joined the organization, we would be forced
to join the WTO under very hard conditions and receiving little privileges
and giving more concessions. Unfortunately, our strategic thinking at the
international level has not succeeded in securing economic benefits for our
country. Accordingly, the main obstacles to our pursuit of effective trade
agreements with the region are political issues and a clear gap that exists
between the political approaches of Iran and other countries or regional
To what extent do you believe the World Trade Organization is losing its
importance, especially after the coming to power of Tramp in the United
I cannot say with the taking office of a person like Trump, the role of WTO
is diminishing, and then assume it as a rule, saying that the role of this
organization is declining throughout the world. The new president of the
United States is a phenomenon in terms of thinking and attitude, and in the
sense of restoring protectionist policies; this is while the United States
itself has been a pioneer in establishment of the body.
But what has happened over the past few decades and gained strength over the
past two decades is that with the rise of the Chinese economy, followed by
other emerging economies such as Brix and the next generation of emerging
economies, the WTO equilibrations have somewhat been disturbed. This was
because industrial justification for manufacturing industrial goods and
exports in the emerging economies was far higher in China and other
countries than industrialized countries. The industrialized countries could
not afford to keep pace to the extent they expected with China’s rapid
growth and emerging economies. The globalization trend in the past 20 years
has served the interest of emerging economies more and has not served the
interests of the United States and other Western countries like it did in
the previous decades. For the same reason, some intellectual currents in the
United States and in developed countries have become suspicious of the World
This is not specific to the United States; in some European countries we see
that some of the right-wing parties, especially the extreme right, have
targeted a course quite opposite to globalization in their slogans and their
statements. For example, the case that occurred in UK and the country came
out of the European Union, was another indication of the fear of countries
from linking economies and the fall of tariffs and non-tariff and trade
I think this is a new generation of equations of balance of power in the
global economy for the benefit of emerging economies and developing
economies that are expanding their own pace and gaining good economic growth
over the past decade; so naturally, the European and American response to
this issue has not been positive. But I do not believe that WTO is going
towards dissolution or effective economies are leaving it.
To what extent do you accept the analysis that Iran, rather than bargaining
to join the World Trade Organization, should enter into the phase of
I myself am among those proposing this idea; our accession to the
organization in the current unfavorable political conditions is virtually
unknown, and it is not clear under what conditions will we join this
organization. For nearly eight years now, the formation of the Working Group
on Iran’s accession to WTO has stopped. The chairman of the Iranian working
group too has not yet been determined, and it is not clear when it will be
determined considering the approach of the United States. So we should not
sit idle until this process begins, which will take at least five to six
years to complete. The right way is to conclude bilateral and multilateral
free trade agreements, especially with neighboring countries and countries
of the region, which are main export markets of our own, as we try to begin
A relatively good work that has been done over the past few years is the
process of full membership of Iran in the Eurasia Customs Union, which
consists of Russia and the states of the former Soviet Union, which is
potentially a good market for us. I hope that the accession process will be
accelerated. However, unfortunately, there is no good news about the
approach adopted by the relevant ministries about our accession to Eurasia.
In other words, by adopting a very conservative and narrow stance, they are
trying to minimize the scope of Iran’s presence in this union. They have
also dropped many Iranian goods from the membership list of Iran or from the
tariff account of free trade.
This is misconduct. If we want to join a multilateral free trade agreement
and make our sensitive list so long that our white list or supplementary
list would include a small amount of our business dealings with these
countries, this would dismantle the effects of that agreement. So if we want
to move that way, it will be symbolic and formal work. But if we do this
with maximum interactive outlook, it is a good move, and we must work with
other countries in the region to enter into bilateral and multilateral trade
agreements. Iran is the only obstacle in the way of implementation of a
preferential trade agreement with ECO or ECOTA. ECOTA has been ratified by
all member countries except Iran and this shows that there is no intention
on behalf of the relevant ministries and their respective authorities to
enter into these commercial blocs. Actually we are isolating ourselves with
our own hands.
What are some practical steps in providing the conditions for joining trade
agreements from your perspective?
The first point to note is that the level of power and authority of our
government in diplomatic engagement with the world is lower than the
standard of other countries. The government is engaged in diplomatic
interaction with its hands tied. See what happened to the JCPOA (Iran
Nuclear Deal)! This deal was perhaps the only case in the last decade and
perhaps over the past 15-16 years where the government was able to create a
high-level consensus for diplomatic engagement. When this was achieved see
how much obstruction has been made in the government’s work.
Now, as you see we make no progress in other diplomatic approaches where we
do not have such consensus. The main issue is that the level of government
authority and decision making power should be the same as other governments,
so that it could have an outlook and maintain policymaking power. The second
point is that, unfortunately, we do not have any strategic economic
development plans so that we could determine which sectors of the economy
need production and investment and in which areas we should work slowly;
since we do not have these strategies, we cannot succeed and concentrate in
the negotiations. We want to support all our industries and not give any
concessions. Obviously this is not the way you should deal with the world!
The world says I give you a point, and you give me a point, while we want
them to give us concessions without compensating; this is not the way to
enter into regional and international business agreements.
Why do you think we have this problem? Because we even do not know how to
deal with ourselves. For example, we want to support both steel industry and
auto manufacturing; we want to support both petrochemical industries and
textiles. We should make it clear what industries we intend to support and
what industries not to support so that our partner economies would know that
we have made up our mind and that these 10 industries are our strategic
industries where we would give less concessions and want more concessions
from you. And the rest are not important and we would give you more points.
On the other hand, we have a strategic gap in economic development, and the
government, unfortunately, has not dealt with this issue professionally.
Even we as the chamber proposed that we are ready as the private sector and
with the help of internationally acclaimed advisers to formulate strategic
economic development plan for the country but the government has not
expressed its consent to this issue and has not welcomed the idea.
The next point is that we, as the private sector and, on the other hand, the
government’s economic apparatus, and in particular the Ministry of Industry,
Mine and Trade and the Ministry of Agriculture, stand on the two sections of
the trade policy. We must sit down and draw the boundaries of bilateral and
multilateral agreements and assign the missions. After that, we must create
the resolve in these two ministries in coordination with the Foreign
Ministry, so that we can proceed firmly and resolutely to close these
agreements within a certain time and enter Eurasia. We must proceed towards
institutionalization of our free trade agreement with Pakistan; try to sign
a free trade agreement with Iraq and Afghanistan. In the meantime, we need
to forge an interactive approach with the Persian Gulf states.
I am an advocate of interaction with the
countries of the southern Persian Gulf. We should also take advantage of the
existing conditions and kick off economic negotiations with the European
Union. We are not in a good position now, but we have the conditions to
start the negotiations.