BACKGROUND: Until recently, Turkish-Iranian relations had been on a downward slope. Whereas in 2010 the government of the Justice and Development Party (AKP) saw Iran as an important partner for managing regional security issues in Syria, Iraq, and elsewhere, since then the two countries’ paths have diverged substantially. Turkey abandoned attempts to mediate Iran’s nuclear dispute with the West and instead agreed to host a NATO missile defense radar that everyone understood was designed to help the Pentagon shoot down Iranian missiles. Active bilateral cooperation against Kurdish separatists waned as evidence grew that Iranians were, once again, supporting the Kurdistan Workers’ Party (PKK). The AKP’s support for the Muslim Brotherhood in Egypt and other Sunni extremists challenged Iranian aspirations to establish more revolutionary regimes modeled after the Islamic Republic of Iran. Turkey and Iran offered competing sectarian models for Middle Eastern nations experiencing an Arab Spring.
The U.S. military withdrawal from Iraq at the end of 2011 then resulted in Turkey becoming the main champion of Iraq’s Kurdish and Sunni minorities against the Iranian-leaning government in Baghdad led by Prime Minister Nouri al-Maliki. Iran proved more successful at organizing a Shiite bloc in the 2010 national elections, but Ankara was well positioned to expand its economic presence in northern Iraq and provide a de facto military guarantee of Kurdish independence against the government in Baghdad.
Most importantly, the AKP turned against Tehran’s Syrian allies after the regime in Damascus of President Bashar al-Assad ignored the recommendations of AKP leaders to reform and instead launched a sustained campaign of state terror against initially peaceful protesters. The Iranian government, seeing the preservation of a friendly regime in Damascus as a vital national interest, denounced Ankara’s lead role in mobilizing an armed opposition to overthrow Assad. The Turks in turn have assailed Iran for providing weapons and military assistance to Assad’s forces, including sending Iranian Revolutionary Guard Corps members to act as military advisers and Lebanese’s Hezbollah fighters to help the battered Syrian army recover from its early setbacks. The two governments engaged in a media and proxy war and suspended important leadership visits and other partnership projects.
Even during these troubled times, however, Turkey engaged in robust economic and energy trade with Iran. In accordance with a 1996 agreement, Turkey imports about 30 million cubic meters of Iranian natural gas, which helps lessen Turkey’s energy dependence on Russia. Although Turkish leaders opposed international sanctions on Iran on principle and because of the restrictions imposed on Turkish businesses, the sanctions regime actually stimulated bilateral commerce as the two countries exploited a loophole that allowed Iran to receive gold for its energy sales. Turkey cannot pay for Iranian energy imports in dollars or Euros, so Iranian corporations have had to accept Turkish Lira and then use that currency to buy gold in Turkey, which can be sold in Gulf markets for a more convertible currency. This practice helped even the trade balance after years of large Turkish deficits.
But this arrangement proved costly to the AKP after the United States realized what was happening and adopted new sanctions that ended this “gas-for-gold” scheme. The arrangement also presented problems at home after allegations arose that senior government officials had enriched themselves by exploiting the lack of transparency of the regime.
IMPLICATIONS: Turkish-Iranian bilateral ties have been on the upswing since Hassan Rouhani was elected Iranian president last fall and adopted a more moderate foreign policy, at least rhetorically. Turkey has welcomed Rouhani’s renewed efforts to resolve his nuclear differences with the West. Ankara backed the November interim deal between Iran and the P5+1 (the UN Security Council’s five permanent members plus Germany) and would like to see a more comprehensive agreement that would prevent Iran from obtaining nuclear weapons while relaxing international sanctions constraining Turkey-Iran economic exchanges.
Iran’s drive for nuclear weapons threatens Turkey at least indirectly by spurring regional nuclear proliferation in Turkey’s neighborhood, challenging Turkey’s status in the region, and by increasing the dangers of an Israeli or U.S. military attack against Iran. Any war involving Iran would present Ankara with a diplomatic, economic, and humanitarian disaster. Conversely, a relaxation of international sanctions on Iran would provide many opportunities for Turkish businesses. Although the nuclear negotiations remain unresolved, Turkish-Iranian trade has already recovered from its recent slump caused by the new U.S. sanctions in Iraq but considerable opportunities exist for further growth.
The obstacle presented to better ties from their diverging Syrian policies have now weakened, even though major differences persist. The AKP’s interest in promoting the Syrian opposition has waned due to Assad’s battlefield successes, and Ankara’s decreasing influence among a Syrian armed opposition that has become increasingly radicalized and potentially a terrorist threat to Turkey. AKP leaders have also become disillusioned with Washington’s reluctance to provide much help in the Syrian endeavor. Whereas Prime Minister Recep Tayyip Erdoğan and President Barack Obama used to exchange weekly phone calls on Syria and other matters, now months pass without any direct communication between them. Erdoğan’s unpopularity in the U.S. Congress, where he is regularly denounced for Turkey’s human rights and civil liberty setbacks, has deprived him of much influence in Washington.
Elsewhere, even though the coup against President Mohammed Morsi in Egypt deprived Ankara of an important regional ally, it has removed a source of tension between Ankara and Tehran since it has put a break on the AKP’s drive to promote itself as the leader of a bloc of Sunni states in the Middle East.
Turkey remains alienated from Israel and joins Iran in offering public support for the Hamas movement and other Palestinian hardliners. The reduced Iranian public feuding with Azerbaijan, an important Turkish ally, removes another source of tension between Ankara and Tehran. Meanwhile, Erdoğan has given up on striving for EU membership any time soon, and has expressed interest in deepening ties with the Shanghai Cooperation Organization, where Iran is an observer. Turkey may come to rely more on Iran and other regional partners to manage the Afghan War now that the West is withdrawing from that conflict. Meanwhile, the Turkish government has decided to purchase a Chinese air defense system even at the expense of antagonizing NATO, which has been operating a Patriot-based air defense system in Turkey for more than a year.
These changed conditions were on display earlier this month when President Rouhani made an official visit to Turkey. Rouhani pledged to reduce regional tensions, curb WMD proliferation, and cooperate with Turkey against mutual terrorist threats. The Turkish and Iranian leaders called the visit “a turning point in relations” between the two countries that is “important for the region and the whole world.” Their joint declaration listed several areas for future cooperation.
Rouhani’s trip to Ankara built on the visit earlier this year of Erdoğan to Tehran when the two governments established a High-Level Cooperation Council to coordinate cabinet-level joint projects by both countries’ ministries. On both occasions, the large entourage included many business leaders and economic officials, reflecting the eagerness to reach new commercial deals despite U.S. insistence that Iran is “not yet open for business.” Erdoğan and Rouhani have called for raising bilateral trade above $30 billion in the next few years. Realizing this goal will require further cooperation to relax international sanctions on Iran’s foreign economic activities as well as joint projects to develop the physical infrastructure between eastern Turkey and Iran.
The extent of direct Turkish-Iranian cooperation remains modest. The new agreements address mostly minor economic issues such as joint film production, scientific and educational exchanges, tourism, cultural heritage programs, and postal cooperation. The main legal and other impediments to Iranian-Turkish mutual commerce and investment persist. In particular, Iran refuses to compromise on Turkey’s major commercial concern, the high price Turkey must pay to import Iranian natural gas under its long-term contract.
CONCLUSIONS: Turkey still faces many challenges regarding Iran. The prospects of a Syrian peace agreement, within the Geneva Talks or any other format, are as dim as ever. The Iranian nuclear negotiations are yet to be concluded and have furthermore aroused unease in many of Iran’s Gulf neighbors. Conversely, a comprehensive and enduring nuclear deal leading to a genuine reconciliation between Iran and the West could harm Turkey by freeing Iranians to cultivate other Western economic partners; it would also reduce Turkey’s status as the West’s most influential, non-Arab, Muslim majority country in the Middle East.
The military success of the newly-self-designated "Islamic State” in Iraq threatens both countries with the advent of a powerful al-Qaeda associated militant group in their common neighbor. But Turkey’s and Iran’s interests in Iraq diverge in other respects. The establishment of a de facto independent Kurdish buffer state in northern Iraq that enjoys Turkish support runs again Iranian interests, challenging as it does Iran’s policy of favoring a strong central Iraqi government under Tehran’s influence.
The Turkish-Iranian relationship is multi-faceted. Although recent developments may have brought the two countries closer again, their relation will remain beset by complications and contradictions.
Richard Weitz is a senior fellow and director of the Center for Political-Military Affairs at Hudson Institute
(Image Attribution: Republic of Turkey Ministry of Foreign Affairs)