Latvia to continue trade with Iran, says Foreign Ministry

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Latvia's Foreign Ministry has confirmed that it would follow the EU in not stopping trade with Iran, despite US calls for the contrary. Nevertheless, Latvia's trade with the country is very limited and has kept on falling for the past few years, reported LTV August 12.

Gints Jegermanis, the press secretary at the Foreign Ministry, said that Latvia supports the EU's joint stance. Nevertheless the Foreign Ministry does admit that the US decision to withdraw from the nuclear agreement has not gone without consequence for Latvia.

"Since this spring Latvian banks have ceased extending credit over Iran, and therefore banks will be very cautious here, it seems," he said.

The ministry stresses, however, that Iran has always been a high-risk country for business and that Latvia's trade volume with the towering Islamic republic has always been minuscule. 

While trade grew from 2012 to 2014 due to grain exports from Latvia - and diplomatic ties became closer, - the 2017 exports were worth just €3 million and just over €0.5 million in the first five months of Latvia.

Most Latvian exports are comprised of wood, transport, fuel, optics, medical equipment, and drugs; but the volume is still very small. 

Politics expert Sintija Broka, a researcher at the Latvian Institute of International Affairs, says that transport and logistics are the only industries in which trade has the potential to grow. 

"Our companies are setting up relations, visit one another, spend their resources to arrange projects. Take, for example, the Latvian Railways logistics project with Iran – about the connectability between Iran, India, and the Baltic Sea region. Latvia would very much benefit from that," she said.

Nevertheless Broka says that relations with the US aren't the only ones that could suffer, as the United Arab Emirates opened an embassy in Latvia in early 2017.

"The Emirates support Trump's decision to withdraw from the nuclear agreement and applaud Trump's initiative to punish Iran," said Broka.

She thinks, however, that cooperation between Latvia and Iran is so slow that it's likely the heated situation will be resolved before Latvia has to take a critical decision. 

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