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Monday, September 20, 2010     GET REAL

Turkey spurns sanctions, plans major investments in Iran

ANKARA — Turkey, defying the U.S. sanctions campaign, plans to triple its trade with neighboring Iran.

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Officials said Iran and Turkey have been planning a huge trade increase over the next year. They said Iran would open its country to massive Turkish investment, particularly the purchase of government-owned companies.

"Our bilateral trade ties have reached $10 billion," Turkish Prime Minister Recep Erdogan said. "When we take away the barriers to trade between ourselves, when we complete our preferential trade agreement, we can reach a bilateral trade volume of $30 billion in five years."


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In a Sept. 16 address to Iranian and Turkish business representatives, Erdogan said he was discussing the trade increase with the Teheran leadership, Middle East Newsline reported. The meeting of 100 industrialists included Iranian Vice President Mohammed Rahimi, who said Teheran would prepare for the sell-off of government companies.

During Rahimi's visit, Iran and Turkey signed several agreements. One of them called for the enhancement of their joint border, including the construction of border facilities.

The business meeting was seen as challenging the U.S. and European Union policy of isolating Iran, particularly its energy sector. In June 2010, Turkey was the only NATO member to vote against United Nations sanctions against Iran, which supplies about a third of Turkey's gas requirements.

In August 2010, a U.S. government delegation held talks with Ankara regarding Turkish business dealings with Iran. Officials said Ankara was warned to sever Turkish banking ties with Teheran.

Officials said Turkey has sought to purchase a major stake in such government-owned industries as automobiles, machinery and textiles. They said Ankara has also sought to enter Iran's huge natural gas sector over the next year.

"We're hoping the efforts of the prime minister pay off, and I think they will to some extent," said Mehmet Koca, a leading Turkish executive and a member of the Iran-Turkey business group.

In 2008, Koca's fertilizer company, Gubretas, acquired a majority stake in Iran's Razi Petrochemical. Koca said additional investments were expected as the United Arab Emirates reduces its huge investment in Iran.

"Finance and trade that was carried out by Dubai and the United Arab Emirates before the sanctions can be taken over by Turkey," Koca said.



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