Japan Set to Resume Business With Iran
TOKYO—Japan signed an investment treaty with Iran on Friday, joining China and others in a scramble for business as sanctions on the Middle East’s second-largest economy are lifted.
Iran has long been a major oil supplier for import-dependent Japan. Now it is again a potential market for Japanese products, including automobiles, aircraft and high-speed railways. The treaty will set the terms for future investment and trade.
A landmark U.S.-led agreement reached last year between Iran and six world powerscame into effect last month, ending years of sweeping sanctions over Iran’s nuclear program. The deal will reopen international markets to Iranian oil and end many restrictions on doing business with Iran and hundreds of Iranian companies.
China is among the countries best-positioned to benefit from the lifting of sanctions against Iran—both as a buyer of cheap Iranian oil and as a seller of much needed infrastructure. While Beijing never officially recognized U.S. sanctions against Tehran, many of its state-owned companies curbed trade with Iran to avoid the risk of penalties from the U.S.
Chinese leaders view Iran as a key part ofChina’s “new Silk Road” vision. The initiative aims to boost Chinese investment and trade from Central Asia to Europe, part of a bid to export vast overcapacity in sectors like steel and to support jobs at home in China.
President Xi Jinping visited Tehran last month, signing a series of economic cooperation agreements, including a deal to finance construction of a high-speed railway.
Mr. Xi’s visit heightened a sense of urgency in Tokyo. Japan is concerned that China will end up dominating trade and natural-resources markets across the Eurasian continent. To check China’s rapid expansion, Prime Minister Shinzo Abe visited Central Asia in October and signed a raft of infrastructure deals.
South Korea is also seeking to increase business with Iran, and expects to sign a range of agreements following ministerial-level meetings scheduled to be held in Tehran later this month.