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Iran expects WTO success after nuclear deal

TEHRAN (AFP) - Iran will be looking for concrete EU support and a slight softening of United States policy when the World Trade Organisation (WTO) meets Monday to consider the Islamic republic's membership application.

The question has been raised at the WTO's General Council meetings since May 2001 and repeatedly rejected by Washington, which broke off diplomatic ties with Tehran after the 1979 seizure of US embassy staff as hostages.

But this time around the Islamic republic see itself in a stronger position to join the 148-member trading bloc.

Last month it agreed to suspend its sensitive nuclear fuel work as part of a deal with Britain, France and Germany.

And in return Iran was promised trade, security and diplomatic incentives -- one of which is the European Union's "actively" supporting Iranian WTO membership.

This in effect means convincing the Americans to ease up.

"Our WTO problem has merely been with one of the members. It is a political issue that has barred us from entering the initial membership negotiations," said Esfandiar Omidbakhsh, an Iranian commerce ministry official charged with the WTO issue.

"Following the initial agreement betwen Iran and the three European countries, especially their commitment to actively support the start of negotiations for Iran's membership of the WTO, our expectation is that this week they pass this test," he told AFP.

Despite support from many Asian countries and the EU, Iran's 19th application for WTO membership was rejected on October 20 due to breach of consensus by the US representative.

For the December 13 and 14 meeting, the United States is still insisting that while it is supporting applications by Iraq and Afghanistan, there is "no consensus" on Iran joining.

But there has been speculation that some countries would only support Iraq's request for observer status if Washington agreed to alter its stance on Iran.

And in addition, EU diplomats say they have made it clear to Washington that yet another veto on Iran could endanger the nuclear deal they have struck with Tehran.

Under the deal, Iran agreed to halt its uranium enrichment activities -- which can produce nuclear power for civilian use or the explosive core of a nuclear bomb -- in return for the promised incentives.

Negotiations on these incentives and on finding a long-term accord on the nuclear issue are set to begin in Brussels on Monday, and an Iranian success at the WTO meeting the same week would provide the talks with a key boost, diplomats say.

"We are not expecting the Americans to join us and the Iranians at the table just yet," one EU diplomat said of the negotiations with Iran.

"But what we don't want is the Americans firing off another torpedo at the WTO. It is not clear if Iran will get through this time around, but we are looking for a softening of their position."

Iran is meanwhile insisting it has taken serious steps to fulfil the economic conditions for WTO membership -- even if the economy is still subject to overwhelming state control and dependent on the oil sector.

During the second term of reformist President Mohammad Khatami's administration, Iran has taken steps to meet the WTO criteria.

The steps have included establishing private banks and insurance companies, breaking government monopolies in some industries, liberalising the foreign exchange system and reducing tariffs.

"The economy is much more prepared for WTO membership in terms of structure and regulations when compared to a few years ago," said Saeed Leylaz, a prominent Iranian economist and analyst.

"Today over 50 percent of the economy can be considered a modern market, while the traditional system controlled some 65 percent of the market during the Iran-Iraq war" of 1980-1998, he said.

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