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Lifting the trade veil in Iran

AAP logoAAP 25/09/2016 Rashida Yosufzai

When Steve Ciobo heads to Iran on Tuesday, it will mark the first time a trade minister has been there in almost 15 years on official business.

In the same year the last Australian minister led a business mission to Tehran, Iran's nuclear program was uncovered - an event from which ricochets are still being felt geopolitically and economically.

As United Nations trade sanctions took their hold, Iran's economy was crippled and Australian exports were also hit hard.

What was once an almost $1 billion export route tumbled to a few hundred million in the space of a decade.

Now with the easing of those sanctions, Canberra is keen to get back on that mission, essentially saying, "where were we?"

Leading a delegation of more than 20 representatives from Australian companies including WorleyParsons and Qantas, the minister will open the government's new Austrade office in Tehran and meet Iranian government counterparts.

"I'm leading this delegation to open doors and to explore the Iranian commercial terrain - that's about creating a pathway for Australia businesses to engage," Mr Ciobo told AAP.

It's obvious why Australia is so keen to get back on track.

For companies selling mining equipment and expertise, Iran is the jackpot: seven per cent of the world's mineral resources are located there and with operations in arid and isolated regions not dissimilar to Australia.

Iran also holds some of the world's biggest oil and gas reserves and wants to boost those exports.

And with its population of over 80 million, education, food, healthcare and water sustainability are lucrative areas for Aussie firms.

Mr Ciobo describes it as an exploratory mission.

"Now that the relationship is moving towards being on the right track there is of course significant potential there."

Australia isn't the only one to find a business bonanza.

The minister believes competition will be strong among other countries keen to make inroads into the once-economically isolated nation, including the US and UK.

But it's thanks to a historically strong trade relationship that Canberra has maintained - including keeping an embassy open amid decades of political tension - that he's confident Aussie firms will be well positioned.

For exporters, the Austrade office is important because it shows Australia is serious about doing business in Iran.

It also helps companies feel more comfortable in an economically sensitive environment, since Iran is still far from open for business.

Given some US sanctions are still in place, Australian firms face considerable risks and restrictions, from the use of credit cards to other financial issues.

Plus, there is also the possibility of sanctions snapping back if Iran fails to meet its end of the nuclear deal.

Mr Ciobo says while the government is keen to set up and help make inroads for the private sector, it's up to businesses to weigh up the risks.

"Fundamentally it's their choice to decide whether to come to Iran or not ... whether or not Iran will present the kind of opportunity they're looking for," he says.

"There is potential but there is still challenge. For Australian businesses it will be an opportunity to identify where the rewards lie and where the risks lay."

And of course, there is also the sticky subject of human rights and asylum seekers, some 8000 of which Iran won't accept unless they go back willingly.

Mr Ciobo expects the topic to come up during his formal talks, and insists concerns over human rights won't be overshadowed by the trade mission.

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