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Op-Ed

Is a Deal With Iran Bad for Turkey?

Kemal Kirişci and Rob Keane

The interim agreement finalized last week by Iran and the six major powers seeking to prevent Iran’s acquisition of a nuclear weapon represents a major victory for international diplomacy and promises significant benefits for Iran’s neighbors, especially Turkey. But while Turkey has much to gain, economically and politically, from a peaceful resolution to the decade-long dispute over Iran’s atomic ambitions, the accord may become yet another challenge to Turkey’s quest for regional influence, leadership and primacy.

Turkey is one of the principal beneficiaries of the deal struck in Geneva on November 24, 2013, the technical details of which were finalized this past Sunday. Turkey is deeply committed to the idea of a nuclear weapons-free Middle East. Statements in recent years by Turkish prime minister Recep Tayyip Erdoğan and foreign minister Ahmet Davutoğlu have evinced a deep skepticism of Western claims that Iran has been seeking a nuclear weapons capability. Nonetheless, they have been very consistent in their condemnation of any attempts to introduce new nuclear weapons into the region[1] and have vocally denounced Israel’s presumed nuclear arsenal.

Iran’s acquisition of nuclear weapons has the potential to seriously destabilize the region by prompting an arms race that might spur Saudi Arabia, Egypt and even Turkey to develop their own nuclear arsenal to deter aggression and restore some balance to the regional power dynamic. By capping Iran’s uranium enrichment and implementing a strict monitoring regime, the Geneva agreement significantly reduces this threat and, at least theoretically, keeps the hope of a nuclear free Middle East alive.

Nearly as important for Turkey as removing the threat of a nuclear-armed Iran is doing so by peaceful means. The United States, Israel, and some European powers continue to stress that the use of military force to prevent Iran’s acquisition of a nuclear weapon is an option that remains “on the table.” An Israeli or American strike on Iran’s nuclear facilities (which would likely require a lengthy bombing campaign) would put Turkey in an impossible position diplomatically and has the potential to cause significant problems for the Turkish government with their own citizens, particularly if attacking aircraft used NATO bases in Turkey or Turkish airspace for the attack. Both Israel and the United States are highly unpopular with the Turkish populace, and with the ruling Justice and Development Party’s (AKP) constituents in particular. The Iraq War was almost universally opposed within Turkey and imposed significant costs on the country’s economy. No one in Turkey wants to see a repeat performance of the events of 2003-2011, or the sanctions that were imposed on Iraq during Saddam Hussein’s reign in the 1990s for that matter.

The Iraq War and the preceding sanctions regime were particularly unpopular because of their restrictions on Turkey’s trade with Iraq and the resulting higher oil and gas prices. Iran is an even larger trade partner for Turkey than Iraq and is also an important source of energy. Turkey runs a major trade deficit with Iran that it has long tried to overcome by expanding its exports—something which is hampered by the current sanctions regime. Many Turkish companies have been badly harmed by the strict sanctions imposed upon Iran by the US and European Union (EU). Turkish construction companies, financial institutions, and manufacturers all have seen their interests in Iran undermined by sanctions. Furthermore, Turkey has long been opposed to unilateral EU and US sanctions that go beyond those authorized by the United Nations and has argued that they disproportionately penalize ordinary citizens and impose unfair burdens on Iran’s neighbors.

The prospect of sanctions relief is good news for Turkey as much as Iran. Turkish-Iranian annual bilateral trade has already grown nearly twentyfold over the past decade, from about $1.2 billion in 2002 to almost $22 billion in 2012, in spite of the bite of international sanctions. However, overall trade with Iran and Turkish exports to Iran contracted by 41 and 63 percent in the first eight months of 2013. Turkish business leaders believe that an Iran unbound by such restrictions would become a rapidly growing export market for Turkish goods and services as well as a fertile field for investment. According to an industrialist familiar with Turkey’s economic relations with Iran, an end to the sanctions regime could open the way for exports of Turkish goods and services to Iran worth more than $90 billion in the medium term. Additionally, the ability to import more of its energy from Iran would reduce some of the squeeze of Turkey’s current dependence on Russia, especially in the gas sector.

But while the Turkish leadership has quickly embraced the Geneva interim agreement as a victory for diplomacy and for stability in the region, the longer-term implications of any international agreement on Iran’s nuclear program may not bode so well for Turkey. While Turkey and Iran are neighbors and trade partners, they are also strategic rivals, and have been for more than five hundred years—going back to the days of the Ottomans and the Safavids. Today, from Lebanon, to Iraq, to Syria and the Gulf, Turkey and Iran frequently find themselves supporting rival parties. They also represent two contrasting visions of Middle Eastern leadership—one a majority-Sunni, secular, democratic-liberal, and market-oriented vision against one based on an authoritarian Shia theocracy where the state heavily dominates the economy. If an Iran that normalizes relations with the West, and especially the US, emerges from this diplomatic accord, Turkey could find its leadership aspirations and prestige in the Middle East gravely challenged by Iran.

In the first place, a final agreement following the general contours of the Geneva Accord (i.e. one allowing for Iranian uranium enrichment up to 3.5%) would formalize Iran’s status as a nuclear break-out state. By de facto recognizing Iran’s right to the full nuclear fuel cycle, the international community would be placing Iran in the company of responsible nuclear states like Germany, Japan, the Netherlands and Brazil, as well as the nuclear-weapons states. These states all have advanced civilian nuclear programs demonstrative of their first-world status and could, if they chose, develop nuclear weapons with relative ease. This would be a significant boost for Iran’s international prestige and could be seen as out-doing Turkey, a G20 and NATO member and EU candidate whose own nuclear energy program is still in its early infancy.

Not only would global acceptance of Iran’s nuclear program bolster its bid for regional leadership, the easing and eventual lifting of economic sanctions against Iran could unleash a heretofore caged Persian Tiger. Iran’s large, educated population, affluent diaspora, and enormous energy wealth could spur an economic boom akin to Turkey’s own last decade. With Iranian industry (especially the energy sector) open to international investment and competition, we could very well see a resurgence of Iranian economic power and influence. Iran is already close on Turkey’s heels in population, GDP, and military might. Without the burden of sanctions and no longer a global pariah, Iran could easily challenge Turkey, Saudi Arabia and Israel to reclaim its status as the premier power in the Middle East, a title it held for much of the 1950s to 1970s.

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Perhaps the most daunting prospect for Turkey, albeit unlikely, is a broader rapprochement between Iran and the West, particularly the United States. The possibility appears remote at the moment. President Obama speaking at the Saban Forum in early December put the chances of a general agreement being reached at “less than fifty per cent”. Yet, some analysts, such as Vali Nasr, Obama’s former advisor on foreign policy, are already speculating that the resolution of the nuclear dispute could pave the way for a more general thaw in Iran’s relations with the United States and Europe. There is certainly a strong interest in Iran’s energy sector, particularly in Europe, where many countries have chafed under sanctions restricting their once-abundant imports of Iranian oil. Several European nations, Germany in particular, are also eager to boost their exports to Iran. Historically the United States and Iran enjoyed an extremely close strategic relationship, one which served as a pillar of American foreign policy in the Middle East. Any predictions of a return to the 1970s for Iran’s relationship with the West are extremely premature, but such a reconciliation could seriously undermine Turkey’s perceived value to the United States and Europe.

Turkey has taken its position for granted as of late, often lecturing its Western allies on Turkey’s growing economic and diplomatic power and bitterly criticizing them for their policies with respect to the military coup in Egypt, the crisis in Syria and the sufferings of Palestinians in the Gaza Strip. But Turkey’s increasingly truculent behavior with its allies, including condemnations of the EU, flirtations with the Shanghai Cooperation Organization and the Eurasian Customs Union, and a potential deal to purchase missiles from China, have caused many in Washington, Brussels and even Ankara, to question Turkey’s true commitment to its Western vocation. Domestic turmoil sparked by the government’s creeping authoritarianism and recent allegations of serious corruption at the top of the ruling party haven’t helped matters.

The agreement signed in Geneva may ultimately prove a great boon to Turkey, further opening a giant market to the east and reducing tensions between its largest ally and its largest neighbor. Yet, there is also a possibility that such an agreement could signal the ascendance of Iran as a major rival for regional power and global influence likely to challenge Turkey’s strategic advantages. Turkey’s leaders should no longer assume that theirs is the only game in town and should consider that if they have other potential friends in the region, so too do the US and Europe.

This article was originally published by
The National Interest
.