Seoul to resume ties with Iran

Korea is set to resume economic cooperation with Iran for the first time in 10 years, thanks to the lifting of economic sanctions.

A total of 95 public and private businesses, including 39 conglomerates and 27 small and midsize enterprises, are heading to Iran with government officials to find opportunities in the Middle Eastern country.

According to the Ministry of Trade, Industry and Energy on Thursday, Minister Joo Hyung-hwan will visit Tehran to attend the 11th Korea-Iran Joint Economic Committee on Feb. 29 to discuss major economic cooperation issues for the first time since 2006.

“It will be an important opportunity to resume economic cooperation between the two countries,” Joo said in a statement. “We will try our best to extend trade between the nations and expand investment. We also expect many businesses to develop new partnerships at this time.”

At the meeting, the two countries will provide institutional strategies for economic cooperation and discuss the type of infrastructure that can be developed in Iran for Korean companies willing to do business there. Joo is expected to meet Iran’s minister of energy and oil.

The two countries will have discussions on six major sectors, each of which consists of three to four agenda items. In one sector, for instance, the countries will discuss finance, tariffs and taxation systems and also energy, resources and mines.

The ministry said the Korea National Oil Corporation will discuss preserving Iranian crude oil in Korea’s oil storage bases with the National Iranian Oil Company. The Korea Gas Corporation will try to launch a project building gas pipelines, while the Korea Electric Power Corporation will seek cooperation to win a project to build a power plant. Doosan Heavy Industries will look for an opportunity to build a freshwater plant.

Korea was the seventh-largest exporting country to Iran in 2006, exporting $1.91 billion that year. The figure increased in the next few years, but started declining after economic sanctions were tightened in 2012.

Korea was the fourth-largest exporting country to Iran in 2014, with $4.58 billion worth of products, after the United Arab Emirates ($32.19 billion), China ($26.77 billion) and India ($4.86 billion).

According to a survey of 453 companies conducted by the Korea International Trade Association, 80.1 percent of respondents said the Iranian market will grow bigger than the market size before the economic sanctions.

“Many of the survey respondents were small and midsize enterprises,” a Korea International Trade Association spokesman said. “They said businesses in the auto parts, car, machinery, food and wireless communication devices industries will have opportunities. Medical devices and cosmetics are also expected to become core exporting products.”

BY KWON SANG-SOO [kwon.sangsoo@joongang.co.kr]