Iran and Turkey said they agreed on Wednesday to strengthen energy, banking and transport ties in a drive to almost treble trade between the two neighbours to $20 billion in the next few years. "The two countries are seriously determined to expand their bilateral relations in all fields," Iran's first vice president, Mohammad Reza Rahimi, told a joint news conference with visiting Turkish Prime Minister Tayyip Erdogan.
Erdogan spoke of plans to increase trade to $20 billion in 2011 and said he welcomed an Iranian call for trade volume to reach $30 billion eventually. Turkish Energy Minister Taner Yildiz said last week bilateral trade was $7 billion in 2008.
Erdogan has steadily expanded Turkey's influence in the Middle East since his Islamist-rooted AK Party took power in 2002. His visit to Iran has added to concern that Ankara may be slowly turning its back on its Western allies and trying to regain its status as a regional power in the Middle East.
The expansion of bilateral ties may cause concern in Washington, an ally of Nato member Turkey. The United States is embroiled in a long-running row with Iran over Tehran's disputed nuclear programme. Iran, the world's fifth-largest oil exporter, is Turkey's second-biggest supplier of natural gas after Russia. Rahimi said the two sides reached a series of agreements, including building two power plants, setting up a free industrial zone on both sides of the border and on Iranian and Turkish banks opening branches in the other country.
He said there were also agreements covering Iranian gas exports to Europe via Turkey and on Turkish investments in Iran's South Pars gas field and in the Caspian Sea, but gave no details. Turkey signed a preliminary deal in November 2008 for gas to be exported to Europe through Turkey and for Turkey to produce gas in the South Pars field.
The investment would amount to $3.5 billion. The deal has been delayed by objections from the United States, which opposes new energy deals in Iran as part of Western efforts to isolate Tehran over its nuclear programme. Iranian media said earlier that Iran had agreed to a Turkish request for a three-month extension of a deadline to finalise the South Pars deal in order to clarify pricing and other details.
"We have more steps to take on economy, trade, oil and gas to promote co-operation," Erdogan said. His comments in Turkish were translated into Farsi. Iran is under US and UN sanctions over nuclear work Tehran says is for peaceful power generation but which the West suspects is aimed at making bombs.