Iraq Looks to Expand Trade with Iran

He noted that the increase would come in the form of investments in the gas and electricity sector. Iran is currently exporting 24 billion cubic meters of gas to Iraq annually. Iraq also imports 400 megawatts of power from Iran through the Kermanshah-Diyala line, the Zihab-Khanaqin line and the Abadan-Basra line. These provinces are provided with electricity through high-voltage power lines.

The Iraqi Ministry of Trade noted that it has restrictions and mechanisms in place to monitor and restrict commercial exchange between Iraq and Iran through mobile teams in the Iraqi market and on the borders. In an interview with Al-Monitor, Undersecretary of Trade Yehya Ahmad Faraj attributed the increase in commercial exchange with Iran to “the desire of Iraqi traders to import Iranian goods, given their competitive prices and the ease of transporting goods and bringing them into Iraq.” He added that according to the ministry, the increase in commercial exchange with Iran does not affect the Iraqi market, since it is a large and open one

Amer Ghanam, who specializes in economic affairs of the Middle East countries, told Al-Monitor that the trade balance is tipping in favor of Iran in an exaggerated way and it is important to bring it back to its normal level. He explained that during the imposition of sanctions on Iran, Iraq has become the biggest trade market for the latter. At the end of 2010, commercial exchanges reached around $10 billion.

Ghanam noted that Iran has taken advantage of the weakness and loyalty of the Iraqi government to send its inferior goods into the Iraqi market. What’s more, Iran competes with the Iraqi market, notably on the level of the agricultural sector. Iran cut off water from a large number of Iraqi agricultural lands through building dams and put its legumes and fruits on the Iraqi market, leaving Iraqi farmers helpless.