Iran’s Barter Trade Deals with China, By-Passing the US-Dollar, “Dedollarizing” Her Economy
Global Research, November 27, 2019
According
to a PressTV Report of 24 November, 2019, Iran and China are working on a
trade or barter deal that would circumvent US sanctions. It would
bypass US-dollar denominated transactions, exchanging Iranian oil for
Chinese goods and services and investments. The head of the Tehran
Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA), Masoud
Khansari told Teheran’s Tasnim news agency, on 19 November 2019 that
“The mechanism, aiming to increase economic exchanges between Iran and
China, is in the process of being finalized and implemented.” He meant
indeed, a barter deal between the two countries, avoiding a monetary
exchange, is being worked out.
This is
nothing new. Already in July 2011, the Financial Times reported that du
to US sanctions against Iran, China, Iran’s largest hydrocarbon client
was unable to pay Iran in cash, as monetary transactions were blocked.
China had at that time accumulated at leas US$ 30 billion in unpaid
bills, which deprived Iran from necessary hard currency to purchase
goods, and mainly medication and medical equipment from countries that
were either daring to go against the US sanctions, or clandestinely on
the black market.
The case was
similar with India which, together with China purchased then almost 50%
of Iran’s oil – Iran’s lifeblood. While India exports almost nothing to
Iran, China is a key exporter of a myriad of goods and services to Iran,
including building infrastructure and investing in expansion of Iran’s
oil sector. That’s when the two countries started making barter
arrangements.
In the
meantime, agreement was reached in July 2015 on Iran’s Nuclear Deal, the
Joint Comprehensive Plan of Action (JCPOA) which for a short time
lifted all sanctions, until on 8 May 2018 President Trump canceled
Washington’s engagement in the deal – most likely on the behest of
Israel – and new deadly US sanctions were imposed, stronger and more
brutal as before – “the strongest ever sanctions imposed on any nation” –
Trump boasted. And with these sanctions came the threat of punishment
for every country that would do business with Iran, including the
European Union members who were part of signing the Nuclear Deal,
Germany, UK, France.
While at the
outset the Europeans did not want to appear as Washington vassals – and
more – their corporations had already signed new business deals with
Iran and were not keen on canceling them, The EU had attempted to design
an international payment system outside of the dollar-dominated SWIFT
transfer system, the Instrument in Support of Trade Exchanges (INSTEX).
Designed in January 2019, it is a special European transfer system,
serving only European purposes to trade with Iran outside of US-dollar
controlled sanctions. However, to this date not one single transaction
has been carried out under INSTEX, mostly because of European’s are
captive of an unexplainable puppetry dependence on Washington. The
leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei called Instex “a bitter joke”.
In comes China
– again, establishing a barter deal with Iran. A TCCIMA delegation
recently visited Beijing and concluded a barter trade agreement that
would be carried out both through mainland China and through Hong Kong.
Among other potential deals for Iran petrol and gas deliveries, are
investments in Iran’s power sector, by Chinese companies in, for
example, energy and infrastructure projects. Rejecting US objections,
Beijing says, dealing with Iran was legitimate under any international
law. Iran is an integral link in the Belt and Road Initiative (BRI).
Earlier this year, Chinese President Xi Jinping
said Beijing was seeking to develop a “comprehensive strategic
partnership” with Tehran; and that “No matter how the international and
regional situation changes, China’s resolve to develop a comprehensive
strategic partnership with Iran will remain unchanged.” President Xi
emphasized that the two sides should work together, “accelerate the
building of a new type of international order and a community with a shared future for mankind,”
– A Community with a shared future for mankind is indeed China’s
long-term objective for decades to come. It converges with those of the
BRI. An objective towards a multi-polar world and a peaceful coexistence
among nations.
Barter deals
do not provide Iran with the necessary cash to purchase needed imports.
There are other avenues than barter, for a rapprochement outside the
dollar-domain in trade between Beijing and Tehran, or Moscow and Tehran,
for that matter. It should be relatively simple to open swap accounts
between the Chinese and the Iranian central banks and to use the Chinese
Interbank Payment System (CIPS) for monetary transfers. Such a solution
should also leave Iran with sufficient revenues to pay for her imports.
The reason such options may not be pursued with more vigor is perhaps
that Iran is still very much divided between those Euro-US-centered
Atlantists and those Iranians who follow the Ayatollah’s vision –
towards a future in the East. A strong Fifth Column in Iran is also
omni-present and rears its ugly neck when ever an opportunity arises,
like the recent 50% hike in gasoline prices.
Its is a
mystery for most observers why the gasoline price increase was not
announced and explained by President Rouhani or Iranian Authorities
prior to being implemented. It may have prevented much of the violence
that is as of this day lingering on, causing bloodshed and mayhem. Most
anywhere in the world, people would take to the streets if they would be
hit with an unexplained price hike of a major commodity. It is as if
the price for bread would double over night – an uproar foretold. That
the opportunity would be taken advantage of by foreign-instigated
violent elements was also foreseeable. And in this case, I dare say,
preventable.
Demonstrations
began peacefully and then suddenly on day two turned violent. It does
not require rocket science to figure out that the violent was planted by
outside forces trained and paid for by such notorious organizations
like the NED (National Endowment for Democracy), the extended arm of
CIA, funded with hundreds of millions from the US State Department.
Those are the same people who are funding the unrests in Hong Kong.
Their brand is chaos, crisis and destabilization – that’s what they do
all over the world where ‘regime change’ is on Washington’s agenda.
These forces are a clear impediment for Iran to go full-fledged their
way to the East, associating wholeheartedly with the Shanghai
Cooperation Organization (SCO) and de-coupling from the western economy.
In the face of
a deeply divided Iran, barter deals with China, and why not with
Russia, may be a first step towards a more serious move to de-dollarize,
to decouple from the west. Iranian people deserve to live well, deserve
to get out from under the misery-imposing boots of Washington. Even the
Euro-centered and Washingtonites must recognize the US-western
hypocrisy and realize that the US will never let go until she has a
total grasp on Iran’s resources – that a resolute move to the east will
give them relief from shortages of food, medicine – and western
oppression and colonization.
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Peter Koenig
is an economist and geopolitical analyst. He is also a water resources
and environmental specialist. He worked for over 30 years with the World
Bank and the World Health Organization around the world in the fields
of environment and water. He lectures at universities in the US, Europe
and South America. He writes regularly for Global Research; ICH; RT;
Sputnik; PressTV; The 21st Century; Greanville Post; Defend Democracy Press, TeleSUR; The Saker Blog, the New Eastern Outlook (NEO); and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance. He is a Research Associate of the Centre for Research on Globalization.
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The original source of this article is Global Research
Posted with permission of the author.
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