The decision by U.S. President Donald Trump to pull the United States out of the Iran nuclear deal and impose economic sanctions on Tehran will have an impact on Belgian companies, the Wallonia Export-Investment Agency (Awex) and the Federation of Enterprises in Belgium (FEB) said on Wednesday.
Walloon companies were hoping to conclude contracts in Iran soon, particularly in mechanical engineering, infrastructure and environment.
According to Awex, Belgium’s exports to Iran came up to almost 550 million euros in the first 11 months of 2017, while imports from the Middle Eastern country amounted to 115 million euros. Iran occupied 87th place among Belgium’s export markets in 2016, and 99th place among Wallonia’s export markets.
After the signing of the Iran agreement in 2015 and the lifting of sanctions, many Walloon companies had resumed prospecting in Iran. The positive contacts they had there augured well for the future conclusion of contracts, according to Awex General Administrator Pascale Delcomminette. “An average of about 30 companies were present on our joint missions to Iran,” she said. “The country offers interesting prospects for Walloon companies.”
Sectors that had shown interest in the Iranian market included agro-industry, mechanical engineering, infrastructure, environment and energy.
Donald Trump’s decision will have a “real impact” on companies in these sectors and is a sword of Damocles hanging over trade relations with Iran, according to Delcomminette. “It will already have psychological repercussions because the companies will fear reprisals.”
Moreover, the banking sector had already been scorched by many painful sanctions in recent years, which made it justifiably careful on Iran. With the re-establishment of sanctions, the banks will be all the more reticent to cover operations in Iran,” Delcominette said.
Europe now needs to delve into its legal arsenal to protect its companies, the Awex General Administrator recommended.
FEB Chief Pieter Timmermans confirmed that Trump’s announcement was bad news for Belgian exporters. “It’s important for Iran to modernize its oil-production, transport, health and energy infrastructure, but also telecoms and banking services” Timmermans said. “This decision has dealt a severe blow to any such modernization.”