The historic nuclear deal between Iran and major powers last week will help expand Turkey’s already lucrative trade with Iran, but it could also disturb Ankara if Tehran seeks to further deepen its growing footprint in the region.
Turkey immediately hailed the nuclear deal, but those in the region who have been wary of Iran’s ambitions expressed concerns that Iran is now free to pursue its destabilizing activities. It is estimated that Iran could receive more than $100 billion from frozen assets thanks to the loosening of sanctions. How could this be harmful to Turkey?
Defying sanctions and working under tremendous international pressure are what Iran does best. Years of crippling sanctions taught Iran how to handle international trade, import key technological and military hardware and circumvent money transfer restrictions. One part of this system was gold-for-gas bargaining between Iran and Turkey. The bargain system collapsed after the U.S. Congress imposed sanctions in mid-2013.
Turkey has always railed against the U.S.-led sanctions and even voted against the harshest round of Iran sanctions at the U.N. Security Council in 2010. Although forced to comply with U.N. sanctions, Turkish officials allegedly used a state bank to divert billions of dollars to Iran. The bank chief was briefly detained as part of a graft investigation in December 2013.
Turkey and Iran have a good deal of geopolitical differences, particularly on Syria. No matter what type of disagreements both countries have gone through, bilateral trade has flourished in the past decade. The recent nuclear deal will set in motion a lucrative economic transaction to add up on $30 billion bilateral trade volume. A Turkish minister said after the deal that it will open up opportunities to step up trade and increase investments.
Even when Turkey and Iran facilitated transfer of money and arms into Syria to shore up both warring sides and jockeyed for political power in Iraq, both countries enjoyed an increase in their trade. Politicians from both countries exchanged visits while new deals to facilitate trade were signed.
How the windfall will be spent?
The question of how Iran’s frozen assets, initially estimated at being over $100 billion, will be spent by Tehran has already become a headache for the U.S. administration. The U.S. State Department acknowledged on Friday that nobody is turning a blind eye to Iran’s destabilizing activities in the region, including its support for Assad.
Few days after Turkish president Erdogan visited Saudi Arabia, who has been attempting to root out Iranian-backed Houthi rebels in Yemen, the president criticized Iran for trying to dominate the region. He said Iran’s goal is to increase its influence in Iraq by chasing ISIS only to take its place. The nuclear deal presents an opportunity for Iran to enhance its activities in the region. It is still unclear if that would significantly disturb Turkey at a time when Turkish politicians are working to form a functioning coalition government.
U.S. President Barack Obama suggested this week that Turkey, Russia and Iran should be part of discussions on finding a negotiated settlement in Syria. The U.S. administration did not make it secret that it has renewed its diplomatic push to resolve the Syrian conflict by closely working with Russia and Iran.
Both these countries loath to see ISIS taking over more territories in Syria. But the ousting of Assad, which Western countries -- particularly Turkey -- have fought hard for, could be a lifeline for ISIS which may fill the vacuum. The "catastrophic success" -- as characterized by U.S. diplomats -- could be a boon to Syrian extremists to plunge the country into even further chaos. To avoid this outcome, U.S. diplomats are hoping to convince the Russians and Iranians to secure a gracious exit for Assad and a negotiated transition to a new form of administration.
Last week, Obama described it as a "glimmer of good news" -- an increasing recognition on the part of all the players in the region that given the extraordinary threat that ISIS poses "it is important for us to work together, as opposed to at cross-purposes, to make sure that an inclusive Syrian government exists."
On that front, it is likely that Turkey will play an important role in talks with Iran to see Assad gone. That could also convince Turkey to fully participate in a global coalition to fight against ISIS.
Mahir Zeynalov is a journalist with Turkish English-language daily Today's Zaman. He is also the managing editor of the Caucasus International magazine. You can follow him on Twitter @MahirZeynalov