German-Iranian Trade and German Industry’s ‘Resistance’ to Sanctions

A Wednesday report in the German economic daily Handelsblatt makes clear that German-Iranian trade continued to boom in 2007 despite existing U.N. sanctions and international calls to isolate Iran economically. According to statistics cited in a report by Germany’s Federal Trade Agency (BFAI), German exports to Iran are supposed to have declined by 15 percent to around €3.5 billion. However, in what the paper calls a “surprising development,” German imports from Iran actually increased by 50 percent to some €580 million. It should be noted, moreover, that both figures are said to be based on statistical data running only through October. This makes the claim for a 15 percent drop in exports appear highly dubious, since as indicated on the Web site of the German Foreign Ministry, German exports to Iran for all of 2006 amounted to €4.11 billion. If the reported volume of German exports for the first ten months of 2007 is extrapolated over a full year, the resulting figure (€4.2 billion) would in fact represent an increase of German exports as compared to 2006.

At the same time, the paper reports growing “resistance” among representatives of German industry to tougher sanctions against Iran. Thus, in an obvious allusion to the conclusions of the American National Intelligence Estimate, the President of Germany’s Federal Association of Exporters (BGA), Jens Nagel, is quoted as saying: “One-sided sanctions would be completely incomprehensible in light of the new political climate. Moreover, we can see very clearly that even in the case of completely harmless goods, business is more and more falling into the hands of Asian competitors.”

“The anger of the German firms is also growing,” Handelsblatt writes, “because the new BFAI report on Iran identifies considerable economic opportunities.” The paper quotes the following assessment from the unpublished report: “Despite the continuing uncertainty in 2008, there is a promising potential for cooperation and supply contracts with Iran.”

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