Iran, India move closer on trade as EU stalls

Iranian President Hassan Rouhani and his Indian counterpart Narendra Modi. (File/AFP)
Updated 08 January 2019
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Iran, India move closer on trade as EU stalls

  • India recently signed a deal with Iran to buy crude in rupees rather than US dollars
  • India imports around 80 percent of its oil needs

NEW DELHI: Iran will boost trade with India as the European Union struggles to find a way to circumvent a fresh US embargo on Tehran, Iranian Foreign Minister Javad Zarif said Tuesday.
Brussels is working on a payment mechanism to keep financial transactions flowing with Iran, after the US ditched the 2015 nuclear deal with Tehran earlier this year and reintroduced a raft of sanctions on the country.
But Zarif told reporters in New Delhi that the EU’s delay in implementing the system meant Iran would look elsewhere.
“Europeans have made efforts but couldn’t... progress up to our expectations. We will expand our cooperation via various channels such as India,” Zarif said after meeting India’s transport minister, as quoted by Iran’s semi-official news agency ISNA.
The EU hopes its “special purpose vehicle” (SPV) announced in September will keep the nuclear deal alive and persuade Tehran to stay on board by giving companies a way of trading with Iran without violating Washington’s sanctions.
But Brussels is struggling to find a host for the SPV and many EU companies are fearful of repercussions from US President Donald Trump’s administration.
India, which imports around 80 percent of its oil needs, recently signed a deal with Iran to buy crude in rupees rather than US dollars, helping it get around the sanctions.
Zarif added that Iran was “very happy” that the Indian government was allowing the Iranian Bank Pasargad to open a branch in India’s financial capital of Mumbai.
India also recently took over the running of part of Iran’s Chabahar Port, in the Gulf of Oman, as the countries build closer ties.
“We hope, despite US sanctions, Iran and India will have more cooperation in line with the interests of the people and the two countries,” said Zarif.


EU sets out plans for ‘limited’ US trade deal

Updated 37 min 6 sec ago
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EU sets out plans for ‘limited’ US trade deal

  • Negotiating a trade deal was included in a transatlantic truce secured last year
  • EU governments were shell-shocked last year when Trump imposed tariffs on metals imports as part of his ‘America First’ vision

BUSSELS: The EU on Friday published its negotiating plans for a free trade deal with the US, part of an effort to avert a trade war with US President Donald Trump.
Negotiating a trade deal was included in a transatlantic truce secured last year after the US slapped tariffs on steel and aluminum imports from the EU, alarming the world.
The effort is also part of an effort to stop Trump from slapping tariffs on European car imports, a danger that has especially unnerved export powerhouse Germany.
“It is not a traditional (trade deal)... it is a limited but important proposal engaged on industrial goods tariffs only,” EU trade commissioner Cecilia Malmstrom told reporters.
The process however has got off to a rocky start, with the US side last week including agricultural products in their plans, which is an absolute no-go for the Europeans.
“In this mandate, we are not proposing any reduction of tariffs on agriculture. That area was left outside,” Malmstrom insisted.
The 17-page mandate submitted by the US also included other demands and charges that are unacceptable for the EU, including that Europe stop manipulating foreign exchange rates.
Given the split, the EU is entering the negotiations with trepidation, especially since the threat of auto duties is still very much alive in Washington.
The commission handles trade negotiations for the EU’s 28 member states and the plans must now be approved by the national governments before negotiations actually start with Washington.
Brussels and member states are wary after the failure of the so-called TTIP talks, a far more ambitious transatlantic trade plan which stalled amid fears a deal with Washington would undermine EU food and health standards.
Opposition by activists has already resurfaced with Friends of the Earth Europe warning that “there can be no trade-offs on food standards” in the deal.
EU governments were shell-shocked last year when Trump imposed tariffs on metals imports as part of his “America First” protectionist vision.
Brussels responded by slapping counter-tariffs on more than $3 billion in US exports like bourbon, blue jeans and Harley-Davidson motorcycles.
But Trump and European Commission President Jean-Claude Juncker in July called a truce, agreeing that as both sides pursued a trade deal, neither would impose additional tariffs.