Removal of Iran sanctions: Is it opportunity or threat for Turkey?

Abstract

After the removal of sanctions against Iran, foreign investors’ interest in Iran, where cheap labor force and attractive investment incentives are located, is regarded as a commercial threat for Turkey. Conversely, Turkey has important opportunities to increase its trade with Iran due shared borders and their trade agreements. In view of this perspective, it is aimed to examine Turkey’s trade with Iran in order to evaluate the opportunities after the removal of sanctions. For this purpose, Iranian trade with Turkey, European Union (EU), United states (USA), Russia and China have been examined using Gravity Model for 1990-2016 period. It has seen that Turkey has a great commercial opportunity compared to the countries mentioned from the analysis results. The analyses have indicated that it is necessary for Turkey to increase its economic relations in order to be able to evaluate its trade opportunities with Iran.