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

Jan. 28 (Bloomberg) -- Turkish Prime Minister Recep Tayyip Erdogan will travel to Iran today as both countries seek to bolster trade and energy ties, while the U.S. cautioned businesses to delay deals with the Islamic Republic.

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

“New domains of cooperation” will be reviewed and “agreements will be signed,” Marzieh Afkham, a spokeswoman for Iran’s Foreign Ministry, told reporters without elaborating. Iran and Turkey plan to form “a grand commission for cooperation,” she said.

Ahead of the visit, the U.S. stressed its commitment to maintaining those sanctions on Iran not lifted under an interim nuclear deal reached last year. David Cohen, Treasury under secretary for terrorism and financial intelligence, said in Ankara yesterday that Iran is not open for business, according to the 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.

Oil Moves

Afkham said Erdogan would also hold talks with Foreign Minister Mohammad Javad Zarif, the country’s chief nuclear negotiator, and Supreme Leader Ayatollah Ali Khamenei.

Turkey and Iran agreed to increase annual commerce 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.

Iranian Oil Minister Bijan Namdar Zanganeh said he and his Turkish counterpart took some “decisions” during talks in Ankara this month and final agreements were likely during Erdogan’s visit, according to the official Islamic Republic News Agency.

Erdogan leaves behind a continuing corruption probe that has led to the jailing since Dec. 17 of Suleyman Aslan, chief executive officer of Turkiye Halk Bankasi AS, 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 Washington-based Foundation for Defense of Democracies, said in an e-mailed article yesterday that “countries are undeniably lining up to do business with Tehran.”

Turkey has openly acknowledged “new economic benefits to reap as a result of sanctions relief” following the Jan. 20 implementation of the nuclear agreement with world powers, including the U.S. and Russia, he said.

“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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