A Lesson in Regional Trade

Published by Financial Tribune Daily July 31st, 2017.

All governments in countries across the Middle East North Africa (MENA) region emphasize the significance of exports. They all want to expand their markets and to depart from their tradition of importing commodities, equipment and consumer goods. Ironically emphasizing global trade has not been translated into strong regional trade in many cases. While they seek stronger trade partnerships with the developed economies or emerging markets, they neglect expanding their regional market. Iran’s exports to Qatar is a case in point.

Following the blockade imposed on Qatar by four Arab countries, the Qataris had to look elsewhere to import food items and agricultural products. Iran was and is an obvious choice. Many Iranian businessmen and exporters also saw this as an opportunity to enter Qatar’s market. However, having an opportunity is one thing, being ready to take advantage of it is quite a different matter.

Between March 2016 and February 2017 Iran exported 103 million USD worth of commodity and products to Qatar. The cargos tonnage was 1,011,704 tone and it included cement, Persian rugs and carpets as well as food items. Iran’s share of Qatar market was small at best and insignificant at worst. Two neighbors did not have a well-established growing trade partnership in commodities and services, although both are adjacent with Iranian ports being among the closest to Qatar.

To assess the size of Qatar’s market, let us remember that compared to Iran, Turkey exported a total of 524 million USD. Still it did feature Qatar’s top 10 trade partners. For its part and with the World Cup 2022 on the horizon, Qatar imports mostly technology, equipment, construction material and mineral. Food and livestock constitute 10 percent of total imports in Qatar. Still Iran’s share of this small segment of Qatar’s import is not significant.

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