Brussels, Nov 22, IRNA -- After nearly two decades of ups and downs, relations between the EU and the Islamic Republic seem to be on the the path of stabilization.

Developments in the last two years show that both sides are determined to cement their economic, trade and political ties, in the wake of the reformist and democratic agenda pursued by the administration of President Mohammad Khatami.

Although a dialogue between the EU and Iran was launched in 1995, it was for the first time in 2001 that Brussels and Tehran took practical steps to put bilateral ties and cooperation in a contractual framework.

The turning point in EU-Iran ties was set by the visit of Dr Kamal Kharrazi to Brussels in September 2001, the first by an Iranian foreign minister to the EU.

Since then top EU leaders, including foreign policy chief Javier Solana and Commissioner Chris Patten have visited Tehran in a flurry of diplomacy, trying to promote closer ties and coordinate positions on issues of common interests.

On 19 November 2001, the European Commission approved a proposal to begin negotiations on a Trade and Cooperation (TCA) agreement with Iran alongside a political dialogue that includes issues like human rights, fight against terrorism, non-proliferation and the Palestinian conflict.

On June 17, 2002, the EU Council of Foreign Ministers gave the Commission the mandate to begin the negotiations and the groundbreaking talks began in December 2002.

Setting the mood of rapprochement, a European Parliament delegation paid a first-ever visit to the Islamic Republic in July 2002, and thereafter Kamal Kharrazi became the first foreign minister of the Islamic Republic to address the EP in Brussels in February 2003.

In June 2003 an Iranian Majlis delegation led by the head of the foreign relations committee Mohsen Mirdamadi visited the European Parliament in Brussels.

However, Iran's nuclear program caused some irritant in EU-Iran ties. After four rounds of TCA talks and three rounds of political negotiations, the EU Council on July 21, 2003 called on Iran to sign the IAEA Additional Protocol.

It also stressed that intense economic relations can be achieved only if progress is reached in the four areas of concern, namely human rights, terrorism, non-proliferation and the Middle East Peace Process.

But in its meeting on 29 September the Council welcomed Iran's stated willingness to cooperate with the IAEA and hoped that Iran will sign, ratify and implement the Additional Protocol.

On 21 October, foreign ministers of France, Germany and the UK visited Tehran upon the invitation of the Islamic Republic. The visit of the three ministers, regarded as an EU initiative, resulted in the signing of the "Tehran declaration" under which Iran agreed to sign the Additional Protocol and voluntarily suspend uranium enrichment while the European side underlined Iran's right to develop nuclear energy for peaceful purposes.

Secretary of Iran's Supreme National Security Council Hassan Rowhani visited Brussels on 17 November for talks with top EU officials on EU-Iran ties and Iran's nuclear program.

Following Rowhani's visit both Iran and the EU stressed their commitment to the Tehran declaration.

An EU statement, read out at the IAEA board meeting in Vienna on 21 November said the EU is willing to consider the new undertaking by the Islamic Republic of Iran as a significant step toward the restoration of confidence in Iran nuclear intention and toward the reassurance of the International Community.

Analysts in Brussels describe these events as the most important developments between Iran and Europe since the establishment of the Islamic Republic in Iran in 1979.

Much of the road is already paved with good intentions on both sides.

President Khatami has paid highly successful visits to six EU countries in the recent past.

The European Union regards Iran's economic potential and its geo-strategic position as too important to be ignored.

Moreover, the market vacuum left by the United States after it shot itself in the foot by disallowing American companies to invest in the Islamic Republic of Iran has offered European companies a golden opportunity to do business in Iran.

According to a European Commission report, EU is Iran's main trading partner concerning both imports and exports. In 2001, EU imports from Iran totaled 6.7 billion euros, whereas the value of EU exports to Iran in the same year amounted to 6.6 billion euros. Whereas more than 80 percent of EU imports from Iran consist of oil products, the exports to Iran are more diversified, with power generation plants, large machinery and electrical and mechanical appliances making-up about 45 percent of the total exports.

A working Group on Energy was established in May 1999 and last year the Commission opened an energy bureau in Tehran aimed at expanding energy cooperation.

Iran is endowed with 10 percent of the world's oil reserves and 16 percent of natural gas reserves. Better relations with Iran would guarantee a constant and stable supply of energy for the EU economy. In a recent report, the Commission said that the EU's dependence on external supplies of oil will increase from the current 75 percent to exceed 85 percent by 2020.

It said that 80 percent of EU's imports of petroleum products come from the Persian Gulf region where the concentration of oil production is likely to increase significantly over the next few decades.

On its part, Iran is trying to rally EU's support in reenergizing the country's application for the WTO membership which was submitted over three years ago and blocked by the U.S.

Fight against drug trafficking is another important sector of EU-Iran cooperation given the fact that a large amount of drugs smuggled from Afghanistan via Iran finds its way into European markets.

European observers are keen to point out that the 15-member European bloc is proceeding in earnest with its engagement and dialogue with Iran despite strong US criticism of Europe's rapprochement with the Islamic Republic.

In two more significant moves to soothe Tehran, the EU in May 2002 declared the Iranian Mujahideen Khalq Organization (MKO) a terrorist group and decided not to table in the UN a resolution criticizing the human rights situation in Iran.

However, nobody expects the EU-Iran rapprochement to be smooth sailing. It appears, however, that the two sides are not looking for tangible results overnight but their approach is a long-term and step-by-step development.

On pre-war Iraq, both Iran and the EU had the same approach that the UN must resolve the crisis and America's unilateral action has to be avoided.

The position of the two sides regarding post-war Iraq is also identical, that the UN must play the central role.

In the wake of the American invasion of Iraq, in stark violation of the UN charter, both the EU and Iran are even more concerned and worried about US intentions in the region.

Therefore, EU-Iran cooperation and engagement are expected to grow and widen in the post-Iraq war developments.