In yet another sign that Turkey’s Eurasian pivot is about cold hard economics, rather than more fleeting ideological concerns, Turkey and Iran have officially announced that future bilateral trade will be conducted in Iranian Rial and Turkish Lira. This represents yet another blow to Dollar hegemony, as countries ranging from Russia, China and Venezuela, begin exploring trading options that are not dependant on the United States.
According to Valiollah Seif, the governor of the Central Bank of Iran, this gives the two countries the potential to treble the current level of bilateral trade which stands at $10 billion per annum, up to $30 billion.
A global effort among countries whose economies aren’t directly tied in to the US financial and monetary systems, to drop the Dollar and begin trading in local and regional currencies, has long been a priority among states that are effectively getting ripped off by Dollar derived exchange rates and practices.
September’s BRICS summit in Xiamen China placed a heavy emphasis on the need for BRICS nations and their partners beyond, to begin developing and implementing different means of exchange than the US Dollar.
The fact that the US has levelled sanctions against economies ranging from Russia to Iran and Venezuela to North Korea, while threatening to do the same to China, has only made the need to find alternatives to the Dollar as the standard trading and reserve currency, all the more pressing.
In the specific case of Iran and Turkey, the move makes good economic sense as it will achieve a more equitable exchange rate in all areas of trade and will also allow Ankara and Tehran to skirt current and future unilateral US sanctions against Iran or even Turkey, should Washington’s relations with Ankara plummet even further.
Furthermore, both Turkey and Iran are under fire from Washington. The US continues to hint at its would-be decision to withdraw from the JCPOA (aka Iranian nuclear deal), in spite of global support for the deal, with the exception of Israel. Furthermore, the US has recently threatened to list Iran’s domestic security apparatus, the Islamic Revolutionary Guard Corps, as a terrorist group, in spite of the fact that their is no evidence linking any Iranian state organ to terrorism. On the contrary the Islamic Revolutionary Guard Corps has assisted both Syria and Iraq in fighting Takfiri terrorist groups, including ISIS and al-Qaeda.
In respect of Turkey, Ankara now finds itself on a list of nations, which includes Russia, where US consular authorities will no longer issue travel visas. This comes as the US complained of Turkey’s arrest of US consular workers, said to have links to the illegal Fethullah Gulen terrorist organisation.
In this sense, Turkey and Iran are showing unity both for practical economic reasons and also with the added geo-political benefit of demonstrating a united Eurasian response to US threats and intimidation tactics.
This is yet a further sign of Turkey’s meaningful pivot away from the west as well as Iran’s commitment to look for new avenues of economic enrichment which are independent of Wall Street and more importantly, of the US Federal Reserve.