Membership in Shanghai Pact helps Iran's trade
Iran has joined a regional pact for the first time since the 1979 Islamic revolution as all the eight members of the Shanghai Cooperation Organization (SCO) voted to change Iran's status in the organization from "observer" to full membership on the second and last day of the organization's 21st summit on Friday.
Iran had first applied for full membership in 2005 and renewed its call for the status during the next summits but its application was rejected by member states, most recently by Tajikistan in 2020. SCO members have always frowned at the membership of countries under US or UN sanctions as they do not wish to compromise their international trade interests.
Before the final vote on Iran's membership, China's President Xi Jinping said via video teleconference Friday morning that Iran's membership would be unanimously accepted by the heads of all the 8 member states. Minutes later, Russian leader Vladimir Putin also said that Russia would welcome Iran's full membership.
Russia had declared two weeks ago that it would welcome Iran's membership if all other member states did so.
Later during the day, Russia, China, Pakistan, India, Kyrgyzstan, Kazakhstan, Belarus and Uzbekistan approved Iran's full membership after a speech by President Ebrahim Raisi in which while praising Asia as the cradle of civilization, he stressed on the importance of diplomacy as a way of securing everyone’s interests.
Meanwhile, Raisi, in a veiled reference to the United States ruled out threats and pressures by big powers, adding that sanctions do not affect only one country, but they leave their negative impact on other states.
He also emphasized that Iran will continue its "peaceful" nuclear activity.
Foreign Minister Hossein Amir-Abdollahian broke the news in a tweet on Friday, adding that the full SCO membership will have a major impact on Iran's relations and regional cooperation that will be focused on Asia and Iran's neighboring countries.
Iran expects to boost its trade with Eurasia following the approval of its new status at the SCO, however, there are still hindrances to that.
First, despite the official announcement of the approval of Iran's full membership, it might take another few years before Iran can benefit from its new status.
However, Iran's international trade cannot take off without a nuclear agreement with the United States and lifting of sanctions, as well as the ratification of financial and banking reforms required by the Financial Action Task Force (FATF) against money laundering and financial support for terrorism.
Despite the advantages given to Iran by Russia, the volume of their trade has remained modest at around $2.2 billion annually.
According to Statis, "In 2020, the value of Russian merchandise exports to Iran amounted to approximately $1.4 billion. The same can be said about Iran’s trade with most of the other members of SCO who like Iran are in need of investments. The only exception is China, which will make its decisions once US sanctions are lifted.
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