European Union |
Iran |
Iran–European Union relations have been strained by the dispute over the Iranian nuclear program.
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The EU, in the form of the "EU three" (France, Germany and the United Kingdom) led by the High Representative, have conducted negotiations with Iran regarding its nuclear programme. The United States and Europe are concerned that Iran is developing nuclear weapons banned in the Nuclear Non-proliferation Treaty.
The EU has led diplomatic talks to get guarantees there will be development of nuclear power only[1] while the United States, backing negotiations for now, has maintained a threat of military force.[2] These talks have not yet succeeded, with the issue going to the UN where sanctions were placed. In 2007 Solana sought to renew talks[3] and is due to meet Ali Larijani on 25 April 2007 to discuss resuming talks.[4] Meanwhile, EU leaders, in April 2007, have imposed sanctions on Iran that go beyond those laid out in UN Resolution 1737.[5]
The EU is Iran's largest trading partner, accounting for a third of all Iranian exports. 90% of these are energy related and Iran is the EU's sixth larges energy supplier. In 2008 Iranian exports to the EU amounted to €11.3 billion and imports from the EU amounted to €14.1 billion. EU exports to Iran are mainly machinery and transport (54.6%), manufactured goods (16.9%) and chemicals (12.1%).[6]
There is significant room for growth, though this is hampered by the nuclear dispute. A Trade and Cooperation Agreement was initialled in 2002 but has been on hold since 2005 because of the dispute. There are no bilateral treaties as Iran is not a member of the WTO.[6]
Iran has also been seeking to develop an oil bourse which would be the first to be denominated in euro. Although this has not featured in relations between the EU and Iran thus far, if it starts work it would have a considerable impact outside Iran.
Iran-EU relations have been further strained recently after the Iranian authorities arrested staff from the UK embassy in Iran, as the UK is a member state of the EU, the EU has responded strongly and states that if the staff are not released then the EU will be forced to take 'strong action' against Iran.
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