A senior French economic and political delegation heads to Tehran on Sunday to lay the groundwork for the first business contracts between France and Iran since an accord to curb its nuclear program in July.
France's main business lobby group, the Medef, is sending a delegation comprising more than 100 firms to Iran, including companies such as oil major Total, planemaker Airbus and car manufacturer Peugeot.
The delegation includes most of France's CAC 40 companies, but also small and medium enterprises with sectors as wide-ranging as agriculture, finance, luxury goods, pharmaceuticals, construction and transport represented.
Heading it up are Agriculture Minister Stephane Le Foll and Trade Minister Matthias Fekl, who will open a new trade office in the Iranian capital on Sept. 22.COMMENTARY: It was predicted that European entities would show an interest in renewing economic ties with the Islamic Republic following the signing of a nuclear agreement, however the rush and scope of interest can still be characterized as remarkable.
The French foreign minister arrived in Tehran on Wednesday, the latest in a string of visits by officials from European countries seeking closer economic and political ties with Iran after the nuclear agreement this month.
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The visit by Mr. Fabius comes as French companies such as Airbus and the carmakers Peugeot Citroën and Renault have been seeking to renew ties with local producers that were cut because of the sanctions.
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Mr. Fabius’s trip follows a visit to Tehran on Tuesday by Federica Mogherini, the European Union’s foreign policy chief. Last week, the German vice chancellor, Sigmar Gabriel, who is also his country’s economy minister, arrived with a business delegation. Mr. Fabius will also have several trade-related meetings.Meanwhile in Washington DC during congressional hearing on JCPOA, much of the talk continued to be focused on potential war with Iran, effectively surrendering considerable post-sanctions business opportunities to the Europeans and Asians. As Tim Maverick at the Wall Street Daily laments in a recent piece subtitled "No lunch for us":
Everyone knows that sanctions on Iran will be lifted eventually.
That’s why European and Asian companies are already in discussions with Iranian officials and businessmen to establish new relationships or to reignite old ones.
But American corporations are being held back by strict, decades-old restrictions on doing business with Iran. Foreign subsidiaries of U.S. companies may be allowed to invest in Iran. But, understandably, executives are wary of running afoul of the politicians.
So, while our top companies stand on the sidelines, our competitors will eat our lunch in Iran.
And it will be quite a tasty lunch, too. China is now Iran’s largest trading partner. And German exports to Iran are expected to quickly grow four-fold from 2.4 billion euros last year to 10 billion euros. Plus, Tehran already said that it will need in excess of $200 billion in investments for its oil and gas industry.
There’s a lot more than energy at play here, too. Iran is also an industrial powerhouse in waiting.
The country is the world’s biggest exporter of cement, and ranks in the world’s top 15 for both steel production and auto production. Iran is also recognized in the global medical community for its work in stem cell research and nanotechnology.
In other words, Iran isn’t a run-of-the-mill emerging market.
The country has little debt, unlike other emerging markets, and has a stock market with a market capitalization of about $110 billion. The Iranian market soared last year in anticipation of a deal, rising a record 130%!
French auto and aviation companies visiting Iran may start shipping parts there within weeks, as they explore deals potentially worth hundreds of millions of dollars, a former French ambassador to the country said.
“Initial agreements may be reached, if not in coming days then maybe within the next few weeks,” Francois Nicoullaud, France’s ambassador to Tehran from 2001 to 2005, said by phone from Paris yesterday. “Within weeks it will be possible to see the start of supplies.”
France is looking to resume trade ties following an interim accord between world powers and Iran that allows sanctions relief in some sectors in return for curbs on Iran’s nuclear program. Talks resuming in Vienna on Feb. 18 will explore whether the sides can reach a comprehensive deal to ensure Iran’s nuclear program is non-military, as it says, and end international sanctions against it.Potentially great news for French business, and Iranian airline passengers and auto consumers
