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Persian Rugs

1. The Issue Woven into the fabric of Iranian history, religion, society, and culture for more than 2,500 years, Persian rugs are geographically integrated into Iran.

When a rug is made in Persia, it is synonymously linked with Iran - Persia and Iran meaning the same thing when referring to rugs. 1 Intricately tie with Iran's economy and trade for centuries, the hand-woven rugs are known for their artistic beauty and quality, particularly rugs made during the Safavid Dynasty (1499-1722). 2 Today, Persian rugs still maintain their prestige. However, the trade has undergone dramatic changes with the introduction of machination, synthetic dyes, and short cuts for weaving, changing how they are traditionally made and undermining their quality and prestige. Deeply tied with Iran in every historical, societal, and cultural threads, Persian rugs has the potential to be a geographic indicator, causing additional tension to mount on the fabric of international trade. Further, what trade impacts are there for Iran 's being a non-member of the World Trade Organization? Last, now that the West focuses on Iran's nuclear capabilities, how will that curtail Iran's access into international trade agreements? All those issues are taken into consideration when examining the case study of Persian rugs.

1. The Issue

2. Description

The History

Oriental Rugs and Carpets. Publisher: The Hamlyn Publishing Group Limited: London, New York, Sydney, Toronto.

Carpet weaving was believed to be introduced by Cyrus the Great during his reign of the Persian Empire in 529 B.C. 3 They were made in villages for personal use with designs and weavings identifiable of the specific village or tribe. The artistic design and quality of Persian rugs reached its pinnacle during the Safavid Dynasty (1499-1722), because the reigns of Shah Tahmasp and Shah Abbas created a weaving industry that focused on "large-scale artistic and commercial enterprise revolving around highly skilled and organized weaving workshops." (Parviz Nemati, page 17) Royal workshops were established specifically for designers and weavers to work creating the best carpets with intricate designs, using silk with silver or gold thread for additional decoration. (Iran Chamber). Artists would create the carpet designs, and the best designs would be woven by the best weavers in the empire. The patronage of the shahs ensured the carpets were top-notched. During this time, trade was established with Europe with Persian rugs as one of the threads that spurred economic exchange, and Persia reached its golden age. The majority of the prized Persian rugs were made from during this time with the two greatest rugs wove in the mosque of Ardebil in 1539 (which are now located in Victoria and Albert Museum in London and the other one in Los Angeles County Museum).

 

The Safavid Dynasty, along with court-endorsed carpet making, ended with the Afghan invasion in 1722. Nader Khan became the Shah of Persia in 1736 but used his people to fight against the Turks, Afghans, and the Russian. Rug weaving survived with craftsmen in villages and nomads continuing to make carpets. However, the artistic designs and quality were not up to par as was in the Safavid period, and no high-valued carpets were woven during this period.

Toward the end of the 19th century, carpet weaving and trade flourished once again. Through trading via Istanbul, Americans and Europeans took an interest in Persian rugs and even established carpet businesses for rugs destined to the West. Today, carpet making is revived and wide-spread, due to the interest from Western countries, particularly Europe and the United States, with weaving made from workshops and in most Iranian homes.

What Makes Persian Rugs Unique?

"Iran is the genesis of most motifs, patterns and traditional colorations produced in rugs throughout the world today." Susie Beringer 4

Oriental Rugs and Carpets. Publisher: The Hamlyn Publishing Group Limited: London, New York, Sydney, Toronto.

 

The Victoria and Albert Museum in London brought a Persian carpet for 2, 500 British pounds in 1892, and it was deemed too expensive. Today, the "Ardebil Carpet" is well-known and is considered the best carpet on public display. In 1999, the famed auction house, Christie's London sold a Persian rug for more than $2 million. 5 Admittedly, those two examples are antique, Persian rugs made during the famed Safavid period; however, even Persian rugs made today are held in prestige. Why?

From the example of the basic rug design below, all rugs have specific characteristics, such as borders, selvage, field, etc. What distinguishes one rug from the other is the design; one unique aspect of the Persian rugs is their curvilinear designs. Curved-design weavings are much more difficult to execute than geometric ones.

 

 

Oriental Rugs and Carpets.Publisher: The Hamlyn Publishing Group Limited: London, New York, Sydney, Toronto .

Another unique quality of Persian rugs is their historical link. Of course, rugs made during the Safavid period are prized because of their unparallel quality and design. However, Persian rugs are still famed for their ties with its regional historical connection. Rugs are named for their designs, tribes, or locations of origin. For example, a rug made in Herat is termed a Herati. Rugs belonging to the Qasagai tribe are distinguished for their use of red and gold colors. 6 Rug weaving is strongly threaded to Iranian that there appears to be a rug named for every single city, tribe, or village of Iran. One can look at a rug and see the history of the weavers. For example, a tribal rug with woven trees state that this tribe was on the move and that rug's "centre is the tree of life and it joins the underworld to this world and to the heavens."

Last, what set a Persian rug from the others are the material and dye used, knot count, the design, and grade. Rugs made of silk or high quality wool are much more expensive than those made of cotton or materials of lesser quality. However, the rug shows better and lasts longer. Vegetable dyes do not run and ruin the rugs when washed or exposed to sunlight. Avoid aniline dyes but chrome dyes are fine since they do not run. With regard to knot count, the higher the knot counts per square inch in the warp, the higher the quality of the rug. (Count the knots on the back of the rug, not the front.) A silk Persian rugs may have more than 1,000 knots per square inch; of course, knot count does not matter when judging tribal or antique rugs since they are not as uniformed as the modern-made rugs. The Turkish-knot or Persian-knot is used to weave Persian rugs. As for design, the more complex the design, such as using curvilinear instead of geometric lines, the higher the rug's price. As for the rug grade, the higher it is evaluated, the more expensive the rug. Still, if the rug is hand-made, antique (particularly during the Safavid period), and well-maintained, the rug is guaranteed to be of high quality and, of course, valuable.

The Trade: Changes and Implications
Rug weaving is an ancient art form created by hands for centuries. It takes a few years to weave one rug; thus, a rug's value partly derives from it being made by hand due to the belief that hand-made products are better in quality and design. Further, the dyes in the past are vegetable- or earth-based, one color in a rug not staining the next. With the introduction of machines into the making of this ancient craft, how will that impact the prices? Further, man-made dyes do run into each other after cleaning. How will that affect the rugs' values? Last, rugs from other countries are gaining in prestige, particularly those from Turkey, China, and India. How will that affect Persian rug trade?

Taken by M. Hoang with permission by Nasser Hajiabbasi's Pazyryk Gallery in Washington, DC

3. Related Cases

Rugmark and Child Labor

This case study details the need for and limited influence of Rugmark, a voluntary program encouraging carpets not made by child labor. It pinpoints child labor, particularly focusing on the carpet making industry, in India where export of carpets to Western countries - United States and Germany - accounts for more than $800 millions annually.

Scotland and China and Cashmere Trade

Britain produces the finest knits in the world using cashmere wool. With limited and lower-grade cashmere output, imported wool from China has helped with the high demand. However, China encroached "upon the domain of the British knitters and rival the limits of wool produced globally." Britain reacted by raising more goats to produce wool since it cannot rely on China to sell the same volume as before, particularly when China makes a higher profit by knitting the products domestically. Negative effects on the environment, particularly deforestation and soil erosion, are briefly examined.

Iranian Saffron

Iran produces 85% of the world's saffron and exported a large quantity to Spain . Spain in return re-exports Iranian saffron as its own. This case does not relate to Iran's carpet industry; however, it does provide that Iran does not belong to the WTO and how it affects Iranian trades.

Saffron was used to make the yellow dye in carpets.

Arab Spice Trade and Spread of Islam: Spice Case

The spread of Islam was helped through the spice trade. Spices were easy to transport, nonperishable, and unbreakable. The trade was innovative because it was direct, which meant the trade did not depend on "intermediaries." Through the spice trade, Islam was spread gradually but more peacefully in "southeast Asia, central Asia and China, and sub-Saharan Africa" than through violent conquests as are the cases in Northern Africa, "Spain, Anatolia, the Balkans, India, Sicily and the Mediterranean coasts of Europe."

Iranian –Russian Nuclear Trade

Iran contracted Russia to rebuild its two nuclear reactors for future energy use with the argument that their supply of oil and gas is exhaustible. The United States objected accusing Iran of building nuclear power for political and military gain. Obstacles to the two reactors from being built are: 1) the Russians have to rebuild reactors that were first built by the Germans; 2) reactors were damaged during the Iraqi-Iranian War in the early 1980s; 3) the Russian's nuclear intelligence and development are not on par as with the United States (i.e. Chernobyl explosion); 3) Russian will only deliver if paid in cash; and 4) Iran may not have the ability to pay the Russian $1 billion dollar. The potential impact on the environment and the people are tremendously negative if either reactor will not function properly.

Basmati

American company RiceTec, Inc. was granted the United States's patent right to call its rice "Basmati" in 1997. India is challenging the United States for "violating on the Geographic Indication Act." India's argument is Basmati rice has a strong and long linkage to India's territory and culture for centuries.

4. Author and Date: My Hanh Hoang (November 18, 2004)

Oriental Rugs and Carpets.Publisher: The Hamlyn Publishing Group Limited: London, New York, Sydney, Toronto .

II. Legal Clusters

United States

A tear in the relationship between the United States and Iran occurred with the fall of the Shah of Iran in 1979. Soon after, economic sanctions set the basis of United States policy toward Iran when American diplomats were held hostages in Tehran. The Clinton Administration continued with additional sanctions due to "Iran's weapons of mass destruction, its support for terrorist groups, and its efforts to subvert the Arab-Israeli peace process." 7

Economic sanctions were imposed on Iranian products, which also included Persian rugs. Before 1979, the United States was the leading importer of Persian rugs. With the sanctions, Persian rug trade was hurt with rug-making not being as developed as before and led to competitors copying Persian designs.

However, encouraged with Khatemi election, the United States eased some sanctioned imports in 2000, such as Persian rugs, and even had then-President Clinton and Secretary of State Albright attended Khatem's Millennium Summit speeches at the United Nations.

Tension has since escalated since the discovery of two nuclear sites. In 2002, President Bush declared Iran as an "axis of evil." Congress soon followed with two resolutions, S.Res.306 and H.Res.504 that did not support Iranian political leaders, which signal the United States shift of support from Khatemi to reformists. No formal dialogue between the two countries have since been established.

Europe

In June 2002, the Council of the European Union opened negotiations on political, trade, and "co-operation agreement." 8

World Trade Organization

Iran applied for WTO membership starting in September 1996, but the United States – along with Israel - was, and still is, successful in opposing Iran's entry. 9

5. Discourse and Status: In Progress

6. Forum and Scope: Iran and Bilateral

7. Decision Breadth: Multiple: Iran, United States, European Countries, Japan

8. Legal Standing: Law

Oriental Rugs and Carpets.Publisher: The Hamlyn Publishing Group Limited: London, New York, Sydney, Toronto .

III. Geographic Clusters

9. Geographic Locations

a. Geographic Domain: Middle East

b. Geographic Site: Middle East Asia

c. Geographic Impact: Iran

10. Sub-National Factors: No

11. Type of Habitat: Dry

Oriental Rugs and Carpets. Publisher: The Hamlyn Publishing Group Limited: London, New York, Sydney, Toronto.

IV. Trade Clusters

12. Type of Measure: Tariff Export

Persian rug trade is the "second major export-earner after oil" 10 comprising 12% of Iran 's non-oil export. Any export tariff affects the carpet industry, particularly the weavers at the based level, because 14% of Iranians depends on rug profits for their livelihood and because rug weaving is such an integral custom in which it is not uncommon for non-weavers to weave on the side for additional income and for many as their sole source of income.

In 1987 when the United States imposed economic embargo on Iran , the thirteen-year trade lapse hurt Iran's carpet industry. 11 During those time, rug competitors, such as India and China, copied Persian designs and took away businesses from Iran . Rug quality and designs declined; thus, when the embargo was lifted in 1990, Iran lost the grip it held on carpet export to the United States. Today, 65% of Persian rugs are exported to Europe. 12

With the current concern from the United States and Europe of nuclear power, trade in Iran is "severely restricted" because of its designation as a "state sponsor of terrorism." 13 Iran's Persian rug trade is in a vulnerable and delicate position with the probability that another trade embargo against all Iran exports to the United States and Europe is likely.

13. Direct v. Indirect Impacts: Direct Impact

14. Relation of Trade Measure to Environmental Impact

a. Directly Related to Product: Yes - Rugs

b. Indirectly Related to Product: No

c. Not Related to Product: No

d. Related to Process: Yes- Culture

Large production of wool is needed to weave Persian carpets. Overgrazing and deforestation are environmental problems Iran is facing.

15. Trade Product Identification: Carpet

16. Economic Data:

For Iran, carpet is the second largest export, next to oil products. Despite of its shaky relationship with the United States, Iranian rugs leads in rugs imports into America. Not even rugs from competing nations, such as India, Turkey, China, or India, have the historical prestige as an authentic Persian rug. Despite receiving imports of only $98.7 millions (of other products and with zero dollars from carpet or floor coverings) from the United States, Iran still exported $160.8 million worth of rugs into America in 2003.
Table One 14
US Imports for Consumption at Customs Value from Iran
By Harmonized Tariff Schedule (HTS) Chapters , ranked by 2003 imports

2003 Ranking HTS Category 2002 2003 2003 2003 2004
million dollars
percent of total
Jan .- Aug.
million dollars
All categories
$156.5
$156.5
$100.000
$105.9
$97.9
1 57. - carpets and other textile floor coverings
$122.9
$129.7
$80.667
$85.1
$79.3

Table Two 15
US Imports for Consumption at Customs Value from Iran
For HTS Chapter 57.--CARPETS AND OTHER TEXTILE FLOOR COVERINGS, by HTS 4-digit categories , ranked by 2003 imports

2003 rank HTS Category 2002 2003 2003 2004
thousand dollars
Percent of total
Jan. - Aug.
thousand dollars
All categories $122,923.1 $129,693.8 100.000 $85,068.6 $79,300.6
1 5701 - carpets and other textile floor coverings, knotted, whether or not made-up $114,890.8 $121,668.1 93.812 $80,054.7 $74,980.9
2 5702 - carpets and other textile floor coverings, woven, not tufted or flockes, not including kelem, schumacks, karamanie and similar hand-woven rugs $7,799.0 $7,355.6 5.672 $4,749.3 $4,098.3
3 5705 - carpets and other textile floor coverings (whether or not made-up), nesoi $112.6 $545.7 0.0421 $171.9 $160.9
4 5703 - carpets and other textile floor coverings, tufted, whether or not made-up $98.4 $97.8 0.075 $68.6 $47.1
5 5704 - carpets and other textile floor coverings, of felt, not tufted or flocked, whether or not made-up $22.2 $26.6 0.021 $24.1 $13.3

 Table Three 16


US Domestic Exports at FAS Value to Iran
For HTS Chapter 57.--CARPETS AND OTHER TEXTILE FLOOR COVERINGS, by HTS 4-digit categories , ranked by 2003 export

2003 rank HTS Category 2002 2003 2003 2004
thousand dollars
Percent of total
Jan. - Aug.
thousand dollars
All Categories $0.0 $3.0 100.000 $3.0 $0.0
1 5703 - carpets and other textile floor coverings, tufted, whether or not made-up $0.0 $3.0 100.000 $3.0 $0.0
2 5701 - carpets and other textile floor coverings, knotted, whether or not made-up $0.0 $0.0 0.000 $0.0

$0.0

Table Four 17

 

CONTINENTS

WEIGHT
Kg 1000

VALUE
$US 1000

SHARE
%

1

AGRICULTURAL PRODUCTS

762,858

669,171

22.207

2

MINE & MINERAL PRODUCTS

8,920,535

549,732

18.243

3

INDUSTRIAL PRODUCTS

3,321,140

969735

32.182

4

HAND-MADE CARPETS HANDICRAFTS

48,015

613,675

20.365

5

OTHERS

1,407,032

210,998

7.002

TOTAL

14459582

3013313

100.00%

 17. Impact of Trade Restriction:

With competitors cutting into Iran's Persian rug trade, Razi Miri, Carpet Exporters Union's Board of Managers, "admitted that the situation in the global carpet market has in recent years proceeded to the disadvantage of Iranians." 18 Now Pakistan and China are benefiting from carpet with their low-cost rugs cutting into Iran's. Currently, Iran's carpet trade's global is only 27%, less than in previous years.

Still, "the carpet industry is a major foreign exchange earner and a vital sector in Iran's fragile economic system, a slump in the industry would unleash unemployment and cost the government hugely." 18

18. Industry Sector: Carpet and Floor Covering (Textile)

19. Exporters and Importers:
Table Five 19

Top Importers

Imports 1998-2002
Product group: 659 - FLOOR COVERINGS ETC.

Reporter

Value 1998
US$ '000

Value 1999
US$ '000

Value 2000
US$ '000

Value 2001
US$ '000

Value 2002
US$ '000

USA

1,181,130

1,331,889

1,564,838

1,509,519

1,638,080

GERMANY

1,615,553

1,412,868

1,130,546

1,166,785

1,040,930

UNITED KINGDOM

970,599

904,235

926,488

954,784

1,035,841

CANADA

498,414

516,554

520,815

502,123

508,393

JAPAN

336,521

344,213

400,222

376,871

369,985

FRANCE

423,562

425,267

398,841

354,396

354,265

BELGIUM LUX

250,970

 

 

 

 

NETHERLANDS

372,951

323,219

277,215

248,829

233,363

BELGIUM

 

247,146

216,978

208,334

203,755

ITALY

222,972

222,904

207,084

183,592

192,044

Table Six 20

Top Exporters

Exports 1998 - 2002
Product group: 659 - Floor Covering and etc.
Reporter

Value 1998

US$ ' 000

Value 1999

US$ 000

Value 2000

US$ '000

Value 2001

US$'000

Value 2002

US$ '000

BELGIUM LUX

2,205,197

BELGIUM

 

2,133,942

2,016,835

1,941,350

2,038,359

USA

833,301

777,862

796,495

715,661

689,223

IRAN (ISLM.R)

605,111

731,890

706,512

601,951

625,103

NETHERLANDS

759,611

661,331

566,344

569,118

620,087

INDIA

615,258

695,041

649,126

583,774

616,115

CHINA

442,611

423,229

476,006

496,090

561,195

GERMANY

504,424

478,612

409,000

439,904

438,148

UNITED KINGDOM

404,836

384,041

375,233

353,251

327,843


V. Environment Clusters

20. Environmental Problem Type: Culture

 

PART 1

 

Mohammad Bairamzadeh has spent more than four months, eight hours each day, tying threads into knots to painstakingly weave a rug. Once finished, the rug will measure six and one half by ten feet, depicting hunters and animals. Mohammad has estimated it will take another five months to finish this task. He has not woven this carpet alone but has help from his wife and teenage son.

 

When the rug is done, Mohammad expects to sell the rug for $3,600. His wife believes the price is too low for the labor, beauty, and quality of the rug.

 

Competition from domestic, machine-made carpet has made it increasingly difficult to sell the carpet at a higher margin. However, Mohammad has confidence that the hand-made carpets are superior to the machine-made ones. "Machine-made carpets wear out sooner. If this one has a life of 20 years (referring to his carpet), that one (referring to the machine-made one) has a life of 5 years. So our carpets are better." 21 Still, he admits his livelihood is hurt by the domestic, factory-made carpets and finds it is harder to sell his rugs than before.