France and United States differ on business with Iran

Although France opened discussions with Iran in 2003, it then became one of the toughest countries in opposition to the Iranian nuclear program, especially after President Mahmoud Ahmadinejad’s election. Despite this stance, which was confirmed by France’s reaction to the draft of the Joint Plan of Action last October in Geneva, French companies were among the first to react in order to take advantage of the new situation created by the conclusion of the interim deal of Nov. 24.

I was part of a delegation comprising more than 120 French companies that recently traveled to Tehran to restore bilateral contacts following years of sanctions. This was the first of that size for several years.

What strikes you most when you arrive in Tehran is how Westernized it is. Even though the country has suffered from years of war with its neighbor, Iraq, and from international sanctions as a consequence of the nuclear dispute, it remains quite developed and is operating reasonably well. Despite heavy snow at the time of the delegation’s visit, roads and streets were clean. Internet connections and telecommunications were readily available everywhere, and not only in the luxury hotels. Women are obliged to wear a veil, but otherwise they are quite free to dress as they wish. The state's main deciders all speak English (if not French, German or Italian), and many of them have been educated in the best universities in Europe or in the United States.

With particular regard to the United States, it is amazing how much its presence can already be felt in Iran, not only on T-shirts and sportswear, but also because Apple, Coca-Cola and IBM, to mention but a few, are very well developed brands within the city of Tehran.

Iran Air has a fleet of Boeing aircraft and continues to obtain spare parts without difficulty.

In oil and gas, which is a very sensitive sector in view of the current sanctions, American equipment, particularly software and hardware, is widespread and largely used in offices and throughout the fields.

This is why the comments from Washington, D.C., were rather surprising. When Secretary of State John Kerry called his French counterpart, Laurent Fabius, to tell him the visit was “not helpful” in convincing Iran to halt its nuclear development program and that it gave the wrong impression that Tehran was open for “business as usual,” he provoked a clear reaction from Pierre Moscovici, the French minister of finance. Responding to Kerry’s claim, Moscovici said that it was not about doing business as usual but, on the contrary, represented a gamble on relations returning to normal in the future. The message was: “Fulfill your obligations and, if one day you do, things will go well.” During President Francois Hollande’s visit to the United States, it is remarkable that the only slight moment of tension was when, during the joint news conference, President Barack Obama warned about doing business with Iran.

However, it was clear that in Iran, the people we met with (businessmen, civil servants, politicians, investment fund representatives, etc.) expressed the clear wish to work with Western companies, either from Europe or from America. Until recently, 40% of Iran’s cars were French, including many Renaults. The oil and gas companies that Iranians wish to attract are all private major companies from those same two continents.

Secretary-General of the Iranian Presidency Mohammad Nahavandian spoke about “building a long-term partnership” and the deputy minister of finance assembled a large group of directors from his ministry, including the head of the stock market, to tell us that “foreign investments are very welcome.” Minister of Industry, Trade and Mining Mohammad Reza Nematzadeh greeted the delegation with references to France and Iran’s shared history, legal systems and former cooperation in diverse industries and the deputy minister of oil and gas expressed his desire to resume cooperation “with all companies.”

In Iran, the tradition of industrialization and a real respect for engineers, as in Germany, Turkey or India, is such that one feels at home when discussing infrastructure, new technology, equipment or factories.

As a result of the sanctions, certain Iranian companies were forced to develop their business on their own, and they are now becoming autonomous and, therefore, in competition with Western companies. This is clearly the case within the energy sector, and the same applies to transport, health care, banking and the agro-food industry.

For all these reasons, ongoing negotiations on the nuclear deal should be a success. This will clearly be of benefit to both sides, Iran and the West. So far, the West is giving quasi-free access to the Iranian market to Chinese and Russian companies, despite the willingness of Iranians to work with Western counterparts and to be clearly connected to the Western world.

This should be undertaken in full respect of the conditions within the context of the negotiations. However, to preserve Iran’s attraction to the West, this new window of opportunity must not be missed. Moreover, to complete the nuclear deal, a minimum of trust should be developed on both sides. Otherwise, the hard-liners will be back and the prospects for peaceful cooperation will disappear.