Erdogan Leads Turkey-Iran Trade Mission as U.S. Cautions

Turkish Prime Minister Recep Tayyip Erdogan will travel to Tehran today as both countries seek to bolster trade and energy ties while the U.S. cautioned businesses to delay deals with Iran.

Erdogan will be accompanied by the foreign, economy and energy ministers as Turkey signs five cooperation agreements, Star newspaper said today, without citing anyone. Erdogan will also meet Iranian President Hassan Rouhani, who has pledged to end his country’s political and economic isolation, it said.

The U.S. is committed to maintaining sanctions on Iran and David Cohen, Treasury under secretary for terrorism and financial intelligence, said in Ankara yesterday that Iran is not open for business, according to Today’s Zaman newspaper.

“Sanctions remain in place and are still quite significant, and businesses that are interested in engaging with Iran really should hold off,” Zaman quoted Cohen as saying.

Turkey and Iran agreed to increase annual trade volume to $30 billion from $22 billion in 2012, as Iran seeks a bigger share in Turkey’s energy market and the two countries work toward preferential trade agreements, according to officials from both countries.

Erdogan leaves behind a continuing corruption probe that led to the jailing since Dec. 17 of Suleyman Aslan, chief executive officer of Turkiye Halk Bankasi AS (HALKB), which handles payments for Iranian energy transactions, and Reza Zarrab, an Iranian-Azeri businessman accused of facilitating illicit deals between Iran and Turkey.

Jonathan Schanzer, vice president of research at the Foundation for Defense of Democracies, said in an e-mailed article yesterday that “countries are undeniably lining up to do business with Tehran,” and Turkey has openly acknowledged “new economic benefits to reap as a result of sanctions relief” implemented with the agreement of world powers including the U.S. and Russia on Jan. 20.

“Erdogan’s visit may signal that Turkey has opted to swim with the current,” Schanzer said.

To contact the reporter on this story: Selcan Hacaoglu in Ankara at shacaoglu@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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