A regional remake of the 'European Coal and Steel Community?'

While much of the Turkish and global media focused intensely on the “secret nuclear negotiations” between Ankara and Tehran at a recently concluded summit of Islamic nations, few noticed what might be an even bigger matter: a new regional currency.

Formally, the meeting was the 25th anniversary of the Organization of the Islamic Conference, or OIC. This 57-state bloc of Muslim countries promotes religious solidarity in economic and other matters.

Headliners included Iranian President Mahmoud Ahmadinejad, Syrian President Bashar al-Assad and Afghan President Hamid Karzai, all in Istanbul for the one-day discussion aimed at developing closer trade ties and addressing poverty in the Muslim world.

The main news on the sidelines, of course, was the talks between Iran and Turkey concerning Iran’s nuclear energy program. The possibility of Turkey helping Iran come in from the cold or even taking custody of Tehran’s enriched uranium is a continuing theme.

But lost in the three-way nuclear horse-trading between the two countries and the International Atomic Energy Agency, or IAEA’s, Mohammed ElBaradei was something else: a minor challenge to the half-century regional hegemony of the U.S. dollar.

During his speech Ahmadinejad argued regional trade should be conducted with local currencies between the members of the OIC.

Following Turkey and Iran’s decision to begin using local currencies in their trade, Syria and Iraq also announced similar plans. Russia, too, could yet become part of the deal.

And this is a very big deal indeed. After all, we all know what the six-nation “European Coal and Steel Community” of 1952 grew up to become: today’s 27-member European Union. Don’t think this is a bit of history lost on those in this new regional discussion.

After Turkish Prime Minister Recep Tayip Erdoğan’s visit to Iran last month, it was announced that Turkey had signed an agreement with Iran to use each other’s currencies in their trade instead of dollars. Now we are talking about the possibility of using local currencies between these four states. It is realistic. First of all it, sounds wise enough from the Turkish perspective, because expanding local currency deals would mean there would less need to accumulate dollars or Euros.

There was another important development mentioned by Ahmadinejad: Iran has decided to lift visa restrictions on Syrians. Because Turkey and Syria abolished visa restrictions for each other’s citizens a few months ago – while there already were no visa restrictions between Iran and Turkey – it now means that anyone coming from any of these three countries will be able to travel to the others freely.

One can thus ask are these the first steps to a new, emerging union in the Middle East?

We all know that Turkey’s new multi-dimensional foreign policy line is based on Ankara’s “zero problems with neighbors” policy. At the same time, Turkey is expanding its economic and political influence in its surrounding neighborhood.

On the other hand, one should not forget that Syrian president al-Assad had already proposed the establishment of a quadrilateral union among Iran, Syria, Turkey and Iraq early this year.

According to Syrian press reports, these countries share the same views on major regional issues, including the geographic unity of Iraq, Iran’s right to nuclear technology, and the Palestinian conflict.

So it would not be too exaggerated to assume that a new alliance is emerging in the Middle East. The important thing is what will Washington’s reaction be to this kind of rapprochement that might eventually lead to a loss in the dollar’s strength?

There are definitely some interesting days ahead on the Middle East policy agenda.