Brazil and Iran sign trade agreement amid Western push for nuclear sanctions; Turkey may offer to host fuel swap.
By Reuters
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Photo by: Reuters
Brazilian President Luiz Inacio Lula da Silva and his Iranian counterpart Mahmoud Ahmadinejad attend an official meeting in Tehran with Iran's Supreme Leader Ayatollah Ali Khamenei on May 16, 2010.
Turkey and Brazil reached an agreement with Iran late Sunday on the procedure for a nuclear fuel swap, a deal which Western powers hope will end a stand-off over Iran's nuclear program. When Ahmet Davutoglu was asked by reporters in Tehran whether there would be agreement on the nuclear fuel swap deal, he replied: "Yes, it has been reached after almost 18 hours of negotiations."
Turkey's foreign ministry said a formal announcement might be made on Monday morning after any final revisions by the Brazilian and Iranian presidents and the Turkish Prime Minister who reached the agreement at talks in Tehran on Sunday.
Turkish Prime Minister Tayyip Erdogan had decided to go to Tehran on Sunday to take part in talks on Iran's nuclear program after the possibility of using Turkey as a location for the fuel swap was included in a draft agreement, according to Turkish television.
A United Nations-backed deal offered Iran last October to ship 1,200 kg (2,646 lb) of its low enriched uranium - enough for a single bomb if purified to a high enough level - to Russia and France to make into fuel for a Tehran research reactor.
Iran later said it would only swap its LEU for higher grade material and only on its own soil, conditions other parties in the deal said were unacceptable.
Iran, the world's fifth-largest oil exporter, says its nuclear program is entirely peaceful and not intended for military use as the West alleges.
The Islamic state started higher enrichment in February to create fuel for the research reactor itself, after the failure of talks with major powers over the nuclear swap. The step brings Iran's enrichment closer to levels needed for making weapons-grade material - uranium refined to 90 percent purity.
Brazil and Iran sign trade deal
Brazilian President Luiz Inacio Lula da Silva was in Tehran on Sunday to help mediate in the standoff over Iran's nuclear program, as Brazil seeks more diplomatic clout on the world stage. The visit was seen as probably the last chance to avoid a new round of UN sanctions against the major oil producer.
Lula said Sunday that Brazil would finance one billion Euros of food exports to Iran over the next five years to make trade between the two countries less dependent on foreign banks. "It does not make sense that the trade between Iranian and Brazilian companies depends on the credit and goodwill of foreign banks," Lula said in a speech to Iranian and Brazilian traders. The United States is pushing for a fourth round of punitive sanctions, including measures targeting Iranian banks and shipping, over its refusal to suspend enrichment-related activity seen by the West as part of a program to develop nuclear weapons.
Behrouz Alishiri, head of an Iranian government body promoting investment in the Islamic state, said on Sunday trade between Iran and Brazil could increase nearly five-fold to some $10 billion, but he did not give a time frame.
Analysts say Western companies are increasingly wary of investing in Iran because of the nuclear dispute and that Tehran is shifting to countries from Asia and elsewhere to develop its oil and gas fields. It has also boosted ties with Latin America.
The head of Brazil's energy regulator said in Tehran on Saturday the two countries were likely to sign a memorandum which would open the way for Brazilian firms to participate in the modernization of Iran's oil sector.
Alishiri told an economic conference attended by representatives from the two countries that Iran offered high returns for foreign investors.
He suggested that Brazilian companies could buy stakes in Iranian state firms to be privatized and also take part in planned bond offerings to help finance energy sector projects.
"Attaining $10 billion in trade exchanges between Iran and Brazil is not far-fetched," Alishiri said, according to state broadcaster IRIB.
"Iran has the highest return on capital in the world, ranging [between] 25-85 percent in some projects. We have no limitation in foreign investment, and welcome Brazil's investment in Iran," he said.
State radio said bilateral trade had increased to more than $2 billion in the 2009-10 year from $500 million in 2005, and was forecast to reach some $10 billion in the next 5 years. Haroldo Lima, the head of Brazil's energy regulator, told Reuters on Saturday that his country could help Iran with equipment and engineering. In exchange, Iran could provide Brazil with drills to help in the exploration of deep-water oil.
Lima said the Iranians had urged Brazilian companies to take part in the privatization of some of Iran's refineries.
During the talks with Lula, Iranian officials seemed to downplay the West's belief that the discussions were the Islamic Republic's last chance to allay growing tension over its nuclear work.
Western and Russian authorities have said Lula's trip was probably the last chance to avoid new UN sanctions against Iran after its refusal to halt its nuclear activities.
But Iran's officials and media seemed to ignore the nuclear issue in public and instead focused on mutual relations.
"Your trip enjoys a special importance due to the onset of serious cooperation between the two great nations and also because many countries are awaiting our added cooperation," state television quoted President Mahmoud Ahmadinejad as saying during a meeting with Lula. Lula also met Iran's most powerful authority Supreme Leader Ayatollah Ali Khamenei, who has the last say on all state matters like Iran's nuclear activities.
"America is angry over the proximity of independent countries like Iran and Brazil...That is why they made a fuss ahead of your trip to Iran," state television quoted Khamenei as saying to Lula. U.S. Secretary of State Hillary Clinton said on Friday that Lula's mediation effort would fail. Turkey and Brazil, both non-permanent members of the UN Security Council, have offered to mediate to find a resolution to the impasse at a time when world powers are in talks to impose a fourth round of UN sanctions on Iran.
Iran had said it viewed the mediation positively.
Lula arrived in Iran on Saturday to attend a meeting of Group of 15 developing nations on Monday. Iran says leaders and top officials from 17 countries from Asia, Africa and South America will attend the meeting to develop economic cooperation.
