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Spain seeks a bigger share in
Iran
By Hooman Peimani
Two
weeks ago, Iranian President Mohammad Khatami ended a
four-day official visit to Spain along with a 70-strong
delegation of government officials and private sector
representatives. Tehran and Madrid both hope that the
visit will pave the way for a drastic expansion of
Iranian-Spanish relations as the two sides signed and/or
laid the ground for trade agreements valued at 5 billion
euros (approximately US$5 billion).
Beside its
economic significance, the visit demonstrated both the
Iranian government's relative success in breaking Iran's
international isolation and the Spanish government's
efforts to expand its share of the Iranian market, an
indication of the growing interest of the European Union
(EU) in expanding ties with Iran. The EU has become
Iran's largest trading partner. Two of its so-called
heavyweights (Germany and France) have dominated
EU-Iranian economic relations since the early 1990s.
In its competition with the latter, Spain has
gradually increased its economic presence in the Iranian
market over the past few years. The Iranian government
has welcomed this development in its bid to diversify
its country's economic partners and also to expand its
political influence in Europe. Apart from the mentioned
objectives, the historically friendly ties between the
two countries over the past few centuries and,
particularly, the absence of tensions and major
conflicts in the contemporary Iranian-Spanish relations
have created suitable grounds for the growth of economic
ties.
In the wake of the Iranian revolution of
1979, the two sides avoided deterioration of relations
in the 1980s and the early 1990s that became the
defining characteristic of Iran's relations with other
major European countries, namely Britain, France and
Germany. In 2001, the official visit to Iran of Spanish
Prime Minister Jose Maria Aznar consolidated ties
between the two countries and paved the way for their
further expansion. During that visit, the Spanish and
Iranian sides concluded economic agreements in certain
areas of mutual interests (eg, energy) and laid the
ground for expanding their economic relations to be
further discussed during President Khatami's visit to
Spain.
Within the existing framework of friendly
bilateral relations, Iranian-Spanish economic relations
have expanded significantly since the late 1990s. Spain
has become Iran's fourth-largest EU trade partner after
Italy, Germany and France, while Iran has become Spain's
third-largest Middle Eastern trade partner, after Israel
and Saudi Arabia. The value of Iranian-Spanish trade in
2002 is expected to reach US$1.5 billion, a significant
increase in comparison to the previous year when their
bilateral trade valued at $1.115 billion.
Iranian-Spanish economic relations comprise a wide range
of fields. Spain helps Iran in the fields of
shipbuilding, oil and gas, power production and fishing,
and Iran supplies Spain with mainly oil and
petrochemicals.
In 2001, Iran exported to Spain
$837 million worth of crude oil and various types of
petrochemical products, while importing from that
country $278 million worth of machinery, power turbines,
medicine and chemical products. Trade activities aside,
Spain has become a large non-Iranian investor in Iran's
fossil energy and petrochemical industries over the last
few years. This has reflected particularly in the
activities of three major Spanish oil and petrochemical
companies in that country. Repsol has invested 2 billion
euros (roughly $2 billion) in exploring and extracting
Iran's natural gas. The latter has uplifted the status
of Spain in the Iranian economy, a result of the
Iranians' efforts to reduce their consumption of oil and
to switch to natural gas both for economic and
environmental reasons.
Another Spanish oil
company, Cespa, has been involved in the development of
Iran's Cheshmekosh oilfield, while negotiating for its
participation in developing certain Iranian offshore
oilfields in the Persian Gulf. In the wake of President
Khatami's visit to Spain, Cespa and the Spanish
government expressed hope to settle disagreements with
the Iranian government on the latter during the
presidential visit.
Finally, in collaboration
with Iran's Petrochemical Industries Organization,
Technica Romidas, yet another Spanish company, operates
a petrochemical unit in Iran's western city of
Kermanshah. Spanish companies have also been active in
three other important and growing fields of the Iranian
economy, ie, power production, shipbuilding and fishery.
In 2001, a branch of a multinational corporation based
in Spain, Foster Dealer, built two large power
generators in Iran. Currently, the company is
constructing another one.
In a joint venture
with an Iranian Persian Gulf shipbuilding company,
Sadra, a Spanish shipbuilder, Ferere, will build in Iran
nine large fishing boats for the value of $130 million.
At last, in collaboration with the Iranian government's
fishing company, She-lat-e Iran, unspecified Spanish
companies will reportedly help Iran both in fishing and
in fish-processing activities. President Khatami's visit
to Spain and its expected agreements are yet another
example of a growing interest - not only by Spain, but
also by the entire EU - in improving and expanding ties
with Iran. Such an approach has made the EU the largest
trading partner of Iran.
The EU will likely keep
this status for a long time given a recent EU decision
to conduct negotiations with Iran for easing trade
barriers between the two sides now tentatively set for
December 2002. Given the emerging disagreements in a
variety of issues between the EU and the United States,
ties with a large and strategically important country
like Iran, including those of Spain, will have a
significant impact on the consolidation of the EU and on
its future rivalry with the Americans.
Dr
Hooman Peimani works as an independent consultant
with international organizations in Geneva and does
research in international relations.
(©2002
Asia Times Online Co, Ltd. All rights reserved. Please
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