TEHRAN – German companies are quite aware that Iran is seeking to transfer technology to the country, the German ambassador to Tehran says.
“My understanding is that German companies are well aware of the importance attached to technology transfer by Iranian partners,” Michael von Ungern-Sternberg told the Tehran Times in an exclusive interview.
This is the text of the interview:
Q: How do you assess the quality of cooperation between Iran and Germany before and after the nuclear deal?
A: It is fair to say that the nuclear deal has created a new atmosphere. The embassy is particularly exposed to this change as we had roughly 10 German delegations since last July and we will be glad to host another 8 delegations by the end of May. These include politicians, entrepreneurs, but also representatives from the fields of education and culture: Two important areas in which Germany and Iran share a long tradition of successful cooperation.
As far as business is concerned, announcement of “Implementation Day” in January must be considered a crucial step as it reshaped the legal framework for economic operators: European sanctions have been abolished to a very large extent, and secondary extraterritorial effects of U.S.-sanctions were considerably reduced. As a consequence, the conditions are favorable for more trade and investment between the German and Iranian business sectors. But of course this is an ongoing process and quite some time might be required before concrete deals on complex investments will be struck. However, we have plenty of reasons to be optimistic, as there is a lot of interest both on the German and Iranian side. A mutual interest which – it should be noted -is based on decades of fruitful cooperation.
Finally, there is the political dimension: After more than a decade without official visits, the German Minister of Foreign Affairs, Mr. Steinmeier, paid two visits in just four months – this surely emphasizes the importance attached to our bilateral relations. Vice-Chancellor Mr. Gabriel was the first to visit the country after the nuclear deal last summer and he will be back in May. In fact, we will soon see the first meeting of our joint economic commission after fifteen years and Mr. Gabriel will head the German delegation.
Q: We are waiting to see the impacts of mutual visits by Iranian and German delegations. How effective can this be?
A: I think they can be useful in many ways, starting with regional issues: Think of the Syria roadmap that was agreed upon by all parties in Vienna. There seems to be a common understanding that we have to get all parties involved to the table if we are to solve this gruesome conflict. We didn’t see the same spirit or this frequency of meetings before the nuclear agreement.
On the economic front, we should be aware that investment agreements usually require some more preparation, especially if higher volumes are involved. Iran is looking for transfer of technology, for the creation of new jobs and production sites. German companies are fully aware of this but these are things which cannot materialize within a week. Now it has only been slightly more than a month since January 16th (“Implementation Day”) and I think we should show some patience.
Q: Can you be more specific about the transfer of technology to Iran? Has there been any agreement on that so far?
A: First of all, these agreements are usually not reached between two governments. It is the private sector, i.e. the German company involved that will have to decide on that. Therefore your question should better be addressed to our car makers, our companies in the field of energy, transport or engineering. These are all sectors where Germany has outstanding capabilities which can be of interest to Iranian business. That said, my understanding is that German companies are well aware of the importance attached to technology transfer by our Iranian partners.
Our job as representatives of the German government is to advise German companies on the considerable opportunities to be found on the Iranian market. Likewise, when talking to our Iranian partners our main advice is to create favorable and fair conditions for outside investment.
This brings me to an important point: What we are looking for in Iran is a level playing field, it is for the companies to take care of the rest. No preferential treatment, but also no discrimination. I think German companies are well prepared for competition and have proven this time and again on a global scale. Of course, sometimes they succeed and sometimes they don’t – such is the nature of the game. From past experience it is, however, safe to assume, that if the market relies on criteria like quality, price, after-sales-service etc., our companies stand a good chance to succeed.
Moreover, in the specific case of Iran and Germany we do profit from a common heritage of close economic cooperation spanning almost a century. Accordingly, many seemingly “newly arrived” German businesses are no strangers to the Iranian market and are capable of relying on their own networks of past business partners. On the other hand, German brands, companies and technology enjoy an excellent reputation among Iranian business. These conditions prepare the ground for an expanded cooperation and both the German-Iranian Chamber of Commerce and the German Embassy are keen to facilitate this process through advice, bilateral economic agreements or by simply allowing the right people to meet. In the end, it will of course be the companies that must come to an agreement.
Q: In addition to the well-known brands, has there been any new German company trying to enter the Iranian market?
A: There are scores of interested companies. Big names like Mercedes, Siemens, Bosch and others listed on the German stock exchange are among them. In addition, there are hundreds of smaller companies, some of which might be unknown to the general public. However, these companies should not be underestimated as their impact on a particular industry may be huge: Many of them are extremely specialized, they might produce hardware for the textile industry or packaging material but they can claim to rank among the globally leading businesses in their field. Time and again I was impressed to see how established and well-known these businesses were when presenting themselves at Iranian trade fairs.
Q: What’s your take on the future cooperation between the private sectors?
A: Our economy is almost exclusively based on private companies. There are only a few German companies that are partly or completely owned by the state. Consequently, the central task of the German government is to provide the private sector with reliable information on this market and to facilitate their access to Iranian counterparts. Of course, the situation here in Iran is different. Next to the private sector there are numerous companies with varying degrees of state involvement. The car manufacturing industry in Iran might serve as a good example. Despite this important role played by the state in the business of the Islamic Republic, it is therefore important to bear in mind that German companies act very much independently.
Q: What is the view of top German officials of Iran-Germany relations? Some are in favor or better relations with Iran and others are not.
A: The political dialogue with Iran plays an important role in our foreign policy. The two recent visits by Minister Steinmeier clearly bear witness to this fact. Moreover, it has been repeatedly emphasized by our minister that Iran as a major regional power must be involved in any negotiations on the Syrian issue. That said, it is of course true that we don’t agree on all issues. These topics should be addressed in a frank an open manner.
Q: Besides Mr. Gabriel who will visit Iran in May, are there other German delegations coming to Iran?
A: The visit of Minister of Economy Gabriel is set. He will chair the meeting of the German-Iranian Joint Economic Commission at the beginning of May. The Joint Economic Commission has existed for a long time but it did not meet for 15 years. Naturally, they have a lot of pressing issues on their agenda, so the visit of Mr. Gabriel is very important. I am sure that he will also be accompanied by a big number of important German economic operators, senior managers from various companies.
Apart from this we have had visits by politicians with economic delegations from the federal states of Bavaria, Lower Saxony and Bremen. We have 16 federal states, so I am sure that more of them will be coming to Iran in the future. There are already plans in a couple of those states to come here. Also, delegations from the private sector will be arriving here in the coming months. So I don’t think there will be a lack of high ranking visits.
Q: Iran has signed billions of dollars of economic contracts with France and Italy during President Rouhani’s visits to Rome and Paris. How does Germany view these contacts? Will Germany want to catch up with the course of events and also sign agreements?
A: In the end, it is up to the private companies to sign agreements. Personally, I believe if there are a number of companies from other European countries coming to the Iranian market, this is a good thing. It shows that Iran is an interesting market place. Of course, in some cases, Iran will sign deals with companies from other countries which German companies would’ve liked to have. That is competition and it is a good thing. If we have fair competition, I am sure German business will do quite well in the Iranian market. So I am not worried about French, Italian or other companies signing contracts here. The only thing I would like to see is that the competition is based on objective criteria: on quality, price, or the question of whether or not a company invests in Iran, creates jobs in Iran or transfers technology to Iran. I am convinced German business will do quite well here in these aspects. So I am not worried if there are deals made with other countries.
Germany is the second largest country when it comes to foreign trade. This shows that German business is attractive and can deal with competition. Competition improves our quality. Without it, quality suffers; the efficiency of an economy suffers. So it is a good thing and I welcome it.
Q: Some analysts believe the opening of the Iranian market after the JCPOA can also create jobs in the European market. What is your view?
A: Yes, I am convinced that there will be positive effects. At the same time we shouldn’t overestimate the amount of jobs it actually creates in Germany. Last year, we had roughly 2.5 billion Euros trade with Iran, imports and exports combined. The total German trade with the world last year, imports and exports combined, was around 2.150 billion Euros. So the trade we have with Iran represents less than 1 percent of our global trade, much less. This means the effect on our labor market is not huge. But nevertheless, we expect German-Iranian trade to grow, it could well double or even triple in the coming years. This will be very positive for our companies, both in Iran and in Germany. We believe Iran has a very important role to play in the region, also economically. So naturally it is an attractive economic partner for us.
In the end, this will create benefits for the European labor market and also for the Iranian labor market. We share the conviction that economic exchange, both investment and trade, creates wealth and jobs. For example, the Iranian government does not just want to import cars, it increasingly wants to build them here. We know that. That is the way German automobile manufacturers engage with many countries in the world. You can see the results of this in Brazil, China and many other countries. Very often German carmakers have a part of the production in other countries, not a 100 percent but a portion of it. Of course some of the cars sold in Iran will be built in Europe, but local content and local production will grow. And that is good for the Iranian market. Iran has many qualified and well-educated people. This will definitely facilitate our economic exchange.
Q: Hundreds of thousands of refugees have fled to European countries, especially Germany. How is Germany going to handle the refugee crisis?
A: In 2015, roughly 1 million immigrants and refugees came to Germany. This has put great responsibilities and challenges on German society. There was a lot of solidarity not just from the German government but also from the German people. They welcomed the refugees at train stations because they knew that many people came from war-torn places like Syria, where they were suffering from the fighting and were threatened by terrorists. It is clear that there is an understanding in Germany that these people need help. On the other hand, a large part of the people who have come to us, did so for other reasons. Some came from other countries; some came from the Balkans, where no war is ongoing. Our task now is to differentiate between those whose lives are threatened by war and conflict and those whose motives to leave their homes are economic ones. Of course this is a big and difficult administrative task. Another important issue is obviously the consequences of the migrant flows for the future of the Schengen area and within the European Union where people could move freely across borders. We are still determined to help people who are in danger; we also have to help the neighboring countries of Syria for instance, Lebanon and Jordan. They cannot be left alone with their problems. This is why conferences like the one we just had in London on refugees are so important to provide support. Of course, the root of the migratory pressures is the conflict in Syria and it needs to be resolved politically. Only when the war ends, Syrians will want to stay at their homes. Only if the war ends, refugees can return to their country. So a political solution to the conflict is the only long term remedy for this. But in the meantime it is necessary to help the neighboring countries of Syria and to find solutions inside Europe. We also have to differentiate between those who have a good reason for coming to Europe and those who are just using the occasion because it is convenient. So our effort at home is very much also trying to reduce the numbers because we feel there are many who don’t have a legitimate case to come to Germany.
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