EghtesadOnline: Iran and Iraq pledged on Monday to bolster their trade and security ties despite a maximalist pressure campaign by the US administration to cut off Tehran’s relations with the rest of the world, particularly its neighbors.
“Iraq is determined to enhance cooperation with the Islamic Republic of Iran in different fields, including railroad transport, tourism, environment, industry, mining, science and culture,” Iraqi President Barham Salih told his Iranian counterpart Hassan Rouhani during a meeting in Baghdad, IRNA reported.
It is Rouhani’s first official visit to the country that initiated a bloody war against Iran and the latter went all-out to help Iraq in the battle with the self-styled Islamic State terrorist group known as Daesh that had captured the Iraqi city of Mosul and other territories in both Iraq and Syria.
“Iran played a very crucial role in defeating Daesh and this is an indication of deep and friendly ties between the two nations. Iran and Iraq have no better option than maintaining their good relationship and developing it,” the Iraqi leader said, while urging closer collaboration to combat terrorism in the region, according to Financial Tribune.
The administration of US President Donald Trump is pressuring Iraq to stop buying energy from its neighbor and sole foreign supplier, Iran, in what has become a major point of conflict between Washington and Baghdad.
Iraqi leaders, fearing that a further shortfall in power would lead to mass protests and political instability in their electricity-starved country, are pushing back on the demand, which is rooted in Trump’s sanctions reimposed on Iran after his withdrawal from the 2015 nuclear deal between Tehran and six world powers.
Tehran and Baghdad plan to raise their annual trade to $20 billion from the current level of $12 billion, according to Iranian officials. The bulk of the trade balance is tilted toward Iran with gas and energy exports.
Message of the Visit
“The message of this visit is that no bureaucracy or third country can negatively affect the friendly and brotherly relations between Iran and Iraq, or undermine their leaders’ will to expand and deepen their ties,” Iran’s president said.
Rouhani noted that there is great potential for cooperation in the energy, transport, technology, customs, border control, security and environment sectors.
“We are keen to offer our technical and engineering services and share our experience in this field with Iraq. We will encourage the private sector to make further investments in Iraq,” he said.
"The Islamic Republic is also prepared to participate actively in reconstruction projects in Iraq."
Rouhani stressed that the two governments should establish effective financial mechanisms to facilitate trade in local currencies.
At a joint press conference after their meeting, the two presidents reiterated their commitment to removing all obstacles to expansion of ties, especially in the fields of economy and security.
“Stability, security and democracy in Iraq are very important to us, as a secure and stable Iraq can help promote stability and security in the entire region,” Rouhani said.
Salih noted that both Iranians and Iraqis will benefit from stronger cooperation.
The Iranian president held talks with Iraqi Prime Minister Adel Abdul Mahdi on the same day, during which they exchanged views on a range of bilateral, regional and international issues.
During Rouhani’s three-day visit, a series of agreements will be signed in different sectors, according to Iranian media.
Ties With Neighbors
The slump in Iran’s economy since Trump’s decision last May to pull out of the nuclear agreement has pushed the Islamic Republic to try to expand commercial ties with neighbors.
The pact lifted sanctions that had been imposed by the United States, European Union and United Nations in return for Iran curbing its nuclear program.
The remaining signatories to the deal have been trying to salvage it, with Britain, France and Germany setting up a trade vehicle for non-dollar trade with Iran. However, US sanctions have largely scared off European companies from doing business with the country.
A senior Iranian official accompanying Rouhani told Reuters that Iraq was “another channel for Iran to bypass America’s unjust sanctions ... This trip will provide opportunities for Iran’s economy.”
Iraqi political analyst, Hisham al-Hashemi, told AFP, “Rouhani is coming to discuss ... trade between the countries [and] the issue of easing trade exchanges in Iraqi local currency and finding other ways, like Germany and Britain, to adopt an alternative European currency to circumvent US sanctions.”
Addressing a press conference with Iraq’s top diplomat, Mohamed Ali Alhakim, on Sunday, Iran's Foreign Minister Mohammed Javad Zarif thanked Iraq for having “refused the unjust and illegal sanctions imposed on the Iranian people”.