Analysis: Iran, EU Edge Closer to Secure Win-win Situation

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Last updated at: (Beijing Time) Thursday, July 11, 2002

Analysis: Iran, EU Edge Closer to Secure Win-win Situation

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A landmark decision by the European Union (EU) to kick off negotiations with Iran on signing a cooperation and trade agreement is raising hopes of a win-win situation as both parties see the significance of the groundbreaking talks.

In a move deviating from the United States, which listed Iran aspart of the "axis of evil," the EU foreign ministers have approved a measure that paves the way for the expansion of Iran-European economic partnership.

The bilateral discussions are expected to take place in September or October, according to Iran's IRNA news agency.

A preparatory meeting between the EU Troika and Iran will be held in Tehran before the negotiations.

Iran, Europe need each other EU foreign ministers in May failed to agree to give the EuropeanCommission a green light to start negotiating the trade and cooperation agreement with Tehran.

The situation, however, quickly changed in June, when the European Union eventually decided to engage in trade negotiations with Iran.

The decision came as both sides realize that a more pragmatic policy is an opportunity to further cooperation in trade, economic and political affairs.

The European Union has been attracted by Iran's economic potential, its geo-strategic position, and the market vacuum left by the United States after it shot itself in the foot by disallowing its own companies to invest in Iran.

Encouraged by Iranian President Mohammad Khatami's trademark policy of detente and dialogue, the EU countries see their chance of success and wastes no time to increase contacts with Iran's reformist government.

The 15-member bloc has been actually pursuing comprehensive tieswith Iran, which plays an important role in solving regional and international issues.

European officials have been engaged in a flurry of diplomacy inTehran since last year, trying to bring closer ties or coordinate stances on issues of common interest.

A five-member delegation from the European Parliament is to pay an official visit to Iran next week for talks on the promotion of parliamentary relations, as well as issues like human rights and the anti-terrorism campaign, IRNA reported on Tuesday.

Meanwhile, Iran's reform-minded President Khatami, who has visited five EU countries during his term of office, is expected inBelgium and Spain sometime this year for talks on deepening ties with the European nations.

The European Union, Iran's largest trading partner, believes that trade with Iran has enormous potential, especially in the field of energy, as Iran is rich in natural resources.

Iran is endowed with 10 percent of the world's oil reserves and 16 percent of natural gas reserves. Better relations with Iran would guarantee a constant and stable supply of energy for the EU economy.

Statistics show that oil products made up nearly 80 percent of the EU's 8.4 billion euros (7.4 billion US dollars) worth of imports from Iran in 2000.

Iran wants Europe to make quick investments and start transferring technology, especially in the area of computer hardware and software, and become more involved in Iran's development.

To encourage foreign investment and transfer of technology, Tehran is also reviewing its current rules and regulations governing its banking system, foreign investment, repatriation of foreign capital and income tax of representatives of foreign companies.

EU embraces engagement with Iran amid US containment

The EU decision virtually ended a months-long impasse over EU-Iran relations and marks a significant break with the United States.

Washington accuses Iran of sabotaging the Mideast peace process,sponsoring terrorism and pursuing the weapons of mass destruction. All the charges have been denied by Iran.

US President George W. Bush even lumped Iran in his controversial rhetoric of "axis of evil," and has accused Iran of trying to destabilize neighboring Afghanistan, which is recovering from years of war and internal strife.

By contrast, European officials say Bush's rhetoric, which is viewed as unnecessarily tough, is hurting the cause of pro-Western reformists in Iran, because anti-American hardliners point to his words as proof that Washington is a threat to the country's security.

Inside Iran, Khatami and reformist allies have been battling hard to carry out the reform promises made to people since Khatami was elected in 1997, while lackluster in the economy eats at the president's popularity day by day.

Official reports say 5.5 million high-school certificate holdersin Iran are expected to join the jobless stream within the next four years, pushing up the unemployment rate to 24 percent.

About 3.5 million of the active population, ages 15 to 64, are said to be unemployed in the nation of 70 million people.

Iran has also registered the highest rate of brain drain in the world.

And ever since Khatami was elected president of Iran, conservatives have been closing in on his core supporters, including intellectuals, political activists, journalists and students.

The moderate president has said if he is not able to fulfill thepromises he made during his two presidential campaigns, he would step down.

In order to shore up Khatami's bruised reform movement, the EU countries have voiced readiness to bolster Iran's embattled forces of reform.

In a move to bail Khatami out of economic woes, the EU countries, like France, have said they would back Iran's bid for entry into the World Trade Organization (WTO).

In another step to soothe Tehran, the European Union in May declared the Iraq-based Iranian opposition Mujahideen Khalq Organization (MKO) a terrorist group.

The upcoming visit by the European Parliament delegation aims topromote the "constructive dialogue" with Iran and support reform inthe Islamic republic, sources in the European legislative body said.

Encouraged by the EU moves, reformists in the Iranian parliamentare urging the government not to blow the chance for improvement ofties with the powerful bloc, which has shown increasing difference from its US ally.

Iranian government spokesman Abdollah Ramezanzadeh said recentlyTehran and the EU are determined to develop ties, regardless of what "third parties might think."

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