EU says to stick to Iran rapprochement despite Trump's criticism

The European Union said on Monday it would keep pushing to restore ties with Iran in line with last year's nuclear deal, which U.S. President-elect Donald Trump has said he will rescind.

Trump has raised the prospect that the United States will pull out of the pact, calling it a "disaster" and "the worst deal ever negotiated" during campaigning for the White House, although he has conceded it would be hard to destroy a deal enshrined in a United Nations resolution.

The deal curbs Iran's nuclear program in return for the easing of Western sanctions and came after years of standoff and growing fears in the West that Iran was seeking to develop nuclear weapons.

Iran denies that its nuclear program has military aims.

"The European Union reiterates its resolute commitment to the (Iran nuclear deal)," the bloc's foreign ministers said in a statement in Brussels.

"The European Union is committed to support the full and effective implementation ... by the lifting of nuclear related economic and financial sanctions and engaging with the private sector and economic operators, especially banks, to promote growth in trade and investment."

Despite concerns over human rights in Iran, the bloc is seeking to open a diplomatic mission there and senior EU officials have visited for talks on issues from trade and investment to migration and humanitarian aid.

QUESTIONS OVER RAPPROCHEMENT

But Tehran complains restoring business ties with the West is moving too slowly, in large part because the United States has kept in place many of its sanctions restricting Iran's access to the international banking and financial system.

Iran holds a presidential election in May and incumbent Hassan Rouhani, whom EU diplomats expect to stay on for a second term, is under pressure to show results from pursuing a tentative rapprochement with the West.

The EU says Iran is running a protectionist economic model with a strong role for the state and its banking sector needs deep reform after years of relative isolation.

"For Iran to fully benefit from the lifting of sanctions... it is important that it addresses obstacles related to economic and fiscal policy, business environment and rule of law," the EU ministers' statement said.

Iran's high taxes on imported products as well as poor anti-money laundering and counter-terrorism financing controls are other obstacles to doing business there, EU diplomats say.

Iran is the largest economy outside of the World Trade Organisation and Brussels says it wants to see it restart talks on meeting all the requirements to join.

Over the decade of sanctions, EU exports to Iran had fallen from 13 billion euros ($14 billion) in 2005 to 6.5 billion euros last year. The bloc's imports from Iran dropped from 11.5 billion euros in 2005 to 1.2 billion euros last year, EU data shows.

But the EU says trade has picked up, with January-June exports to Iran up by 13 percent at 3.565 billion euros from the same period last year. EU imports from Iran were up by 52 percent at 396 million euros, according to EU figures.

European diplomats fear that growing trade would be thwarted should Trump act on his criticism of the nuclear deal.

(Editing by Janet Lawrence)

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http://www.reuters.com/article/us-usa-trump-eu-iran-idUSKBN1391DK