Domestic Economy

New Chapter in Iran-Iraq Trade Ties

New Chapter in Iran-Iraq Trade Ties New Chapter in Iran-Iraq Trade Ties

Iran and Iraq should pursue the path of industrial and economic development without relying on oil, Iran’s First Vice President, Es’haq Jahangiri, said on Tuesday, describing the recent turmoil in the global oil market as “political conspiracy leveled against independent countries.”

In a meeting with Iranian businessmen in Baghdad, he said overreliance on oil is a serious challenge that both Iran and Iraq are currently faced with, expressing hope that oil will return to its “real position” with the help of both Iran and Iraq.

He noted that leaders of both countries have “political will” for expansion of bilateral ties, saying: “The traders, business people and investors from private sectors of Iran and Iraq have a decisive role to translate such political will into action.”


“Statesmen from both countries have a duty to pave the way for the expansion of bilateral ties by removing existing hurdles, so that the goals can be achieved,” Jahangiri said, hoping for an increase in annual bilateral trade.

The first vice president, who is heading a political and economic delegation, arrived in the Iraqi capital Baghdad on Monday to attend the Iran-Iraq High Joint Commission and confer with Iraqi officials.

During the meeting of the Iran-Iraq High Joint Commission in Baghdad on Monday, which was attended by Jahangiri as well as Iraqi Prime Minister Haider al-Abadi, ten memorandums of understanding on bilateral cooperation were singed.

The MoUs cover cooperation in rail, road and air transportation, tourism, trade, agriculture as well as the issue of dust storms, among other areas.

The participants agreed to hold a third session of the joint commission in the near future.

> Bilateral Trade to Reach $20b

Iran and Iraq will increase trade from the current $12 billion to $20 billion, Iran’s Minister of Finance and Economic Affairs, Ali Tayebnia, said on Monday.

Pointing to the reconstruction projects currently underway in Iraq, Tayebnia said: “Iran is ready to cooperate and provide technical and engineering services to Iraq, particularly in the fields of construction of roads, power plants and dams.”

The minister said Tehran and Baghdad can bolster “religious tourism ties”, noting that millions of Iranian pilgrims annually visit Iraq's holy cities, while many Iraqis travel to Iran.

Religious tourism is said to be significantly contributing to Iraq’s economy. Home to major holy Shia sites, Iraq is attracting millions of Shia Muslims from various countries particularly Iran. As of 2013, religious tourism was estimated to account for $222 million of Iraq’s GDP.

> Joint Chamber of Commerce

In separate remarks, head of Iran-Iraq joint chamber of commerce, Ja'far al-Hamdani, announced that the Iran-Iraq joint chamber of commerce has been established in Baghdad, explaining that it is directly affiliated with the Iran-Iraq joint chamber of commerce based in Tehran.

“We are expecting cooperation that is beyond trade exchange. We seek joint investment,” he said on the sidelines of his visit to Iran’s exclusive trade fair in Baghdad.

He further noted that the housing sector, electricity, water and waste water are among the major areas in which both countries can make join investment, saying that the exclusive trade fairs will give a boost to economic development of both countries.  

Iran's exclusive trade fair in Baghdad was officially inaugurated on Monday in the presence of high-ranking Iranian and Iraqi officials.

More than 250 Iranian companies are showcasing various commodities in the exhibition, ranging from building materials to water and electricity, car and medical equipment, food, petrochemical and engineering products.

Jahangiri, paid a visit to the fair on the second day of his official visit to Baghdad.

Elsewhere, Iran’s commercial attaché to Baghdad, Ebrahim Reza-Zadeh, said the fair is an opportunity for Iranian companies to introduce their products to the Iraqi market.

Trade between Iran and Iraq has experienced a twenty-fold increase since the overthrow of the former Iraqi dictator, Saddam Hussein.

Despite occasional ups and downs, bilateral trade has been on the rise since past few years to the degree that Iraq has now become the biggest market for Iranian exports.  

While Iraq’s exports to Iran has been minimal, Iran has been exporting a wide range of commodities to its neighbor including mineral water, apple, yoghurt, biscuit, pistachio, cement, tile, ceramics and etc.  Iraq exports to Iran include commodities such as iron scrap, tobacco and aluminum alloy.

With a population of more than 31 million, Iraq is the biggest country on Iran’s eastern borders. Iraq also borders Turkey to the north, Kuwait to the southeast, Saudi Arabia to the south, Jordan to the southwest, and Syria to the west.

Like many other countries in the region, Iraq's economy is mainly dominated by oil, accounting for 95% of its foreign exchange earnings.