French business delegation, biggest in years, visits Iran in effort to revive economic ties

TEHRAN, Iran – A large French business delegation arrived in Iran on Monday hoping to revive economic ties amid the easing of Western sanctions following a landmark agreement over Tehran’s disputed nuclear program.

The 107-member French investor team is the largest European business delegation in over 30 years. They met private Iranian business leaders on Monday and are to attend an Iranian-French business conference Tuesday.

Executives from some of France’s biggest companies, including energy giants Total, telecoms group Orange, power company GDF Suez, carmaker Renault and engineering firm Alstom are just part of the delegation on the three-day visit.

Semiofficial Fars news agency said other economic sectors such as information technology and hotel groups, as well as financial, banking and investment, water, aviation, cement, food industry, shipping, insurance and pharmaceutical companies are also represented in the delegation.

The visit follows similar delegations from the Netherlands, Germany, Italy, South Korea and other countries that have flocked to Iran recently to explore new trade opportunities after Iran reached a historic deal with world powers in Geneva on Nov. 24.

Under the six-month interim deal, Iran halted its most sensitive uranium enrichment activities in return for an easing of Western sanctions over its controversial nuclear program.

Iran stopped enriching uranium to 20 per cent, which is just steps away from weapons-grade, and started neutralizing its stockpile of it on Jan. 20 to meet its obligations under the historic accord. The U.S. and the EU simultaneously announced the lifting of sanctions on petrochemical products, insurance, gold and other precious metals, as well as the auto industry and parts and services for passenger planes.

They also plan to release $4.2 billion Iranian assets of oil revenues blocked overseas, in 8 installments over a period of six months. The first installment of $550 was provided to Iran on Feb. 1, according to Iranian officials.

Iran’s state TV said the French business leaders met Iranian president’s chief of staff, Mohammad Nahavandian, an economist who also heads Iran’s Chamber of Commerce, Industry and Mines. He urged French business leaders to look at long-term projects in Iran.

“At negotiations, look long-term, not short-term. Whoever looks long-term in Iran will be the winner,” the semiofficial ISNA news agency quoted him as saying. “Iran is not only a market of 75 million people. It’s the gate to Central Asia, a market of 350 million people.”

Iran’s economy, battered by years of sanctions, has been showing signs of recovery since the nuclear deal, a shift toward market-friendly policy, and practical measures including the sanctions relief.

The easing of sanctions may help Peugeot, Europe’s No. 2 automaker, which saw its profits hurt by the sanctions. Peugeot sold more than 450,000 cars annually in Iran before the sanctions, while Renault sold more than 100,000 cars there in 2011 before pulling out.

Sanctions knocked Iran’s automobile production down by 72 per cent last year compared to 2011, when it produced some 1.6 million cars. The relief now allows French companies to resume auto parts sales to Iran’s biggest carmakers.

Mahdi Aboutalebi, a senior Iranian trade official, said it was a “strategic mistake” by Peugeot to pull out of Iran in 2011 because it lost a great market but now is trying to retake its share that may not happen easily because other automakers, including those from South Korea, took its place.

Iranian media have claimed that American companies are also negotiating with senior Iranian officials through their representatives in other countries.