The talks, broken off 19 months ago, are being revived after the agreement between Iran and Britain, France and Germany that the Islamic republic would suspend its uranium enrichment and reprocessing activities for military purposes. The Guardian
David Gow in Brussels
The EU will today defy the US and resume trade talks with Iran in the hope of opening up one of the world's fastest-growing countries to greater foreign investment.
The talks, broken off 19 months ago, are being revived after the agreement between Iran and Britain, France and Germany that the Islamic republic would suspend its uranium enrichment and reprocessing activities for military purposes.
Iran, whose growth averaged 5.8% over the past three years and reached 7.4% in 2003, has seen its trade with the EU decline over the 25 years since the mullahs ousted the shah in 1979 but it still amounts to 10bn (£7bn), or 30%, of Iran's total trade.
Senior European commission officials said in seeking to win a trade and co-operation agreement with Iran the EU was backing its case to join the World Trade Organisation and was offering it a WTO-style bilateral agreement, including lower tariffs.
Benita Ferrero-Waldner, the external affairs commissioner, said the resumed talks were "a clear signal of our wish to work with Iran" and the country could look forward to a richer relationship "as long as the international community can be confident that Iran's nuclear programme is not being developed for military purposes".
Her aides said it would help end the country's pariah status by showing its commitment to greater transparency and non- discrimination, including in areas such as drugs trafficking and illegal immigration.
Via tariffs as low as 3% the EU would be encouraging Iran to export more of its goods, especially oil, which accounts for 84% of trade with Europe. It would also be keen for the country to open its market to EU companies active in chemicals, transport, machinery and financial services. US companies are legally banned from trading with Iran.
The senior officials said Iran had 700,000 new job- seekers each year and the government had a desperate need for foreign direct investment.
Any trade agreement would have to be matched by parallel co-operation in four areas: human rights, regional security in the Middle East; the fight against terrorism and non-proliferation of weapons of mass destruction.
Iran's civilian nuclear programme, mistrusted by the US, is being monitored by the international atomic energy agency and the EU made plain that, if the Vienna-based body found breaches of the Paris agreement with Britain, France and Germany then trade talks could again be suspended.
The clear aim is, however, to reach a deal later this year.