As Iraq naturally tends to put its own interests first when it comes to its foreign policies, sensible approaches need to be adopted by Iran to safeguard its benefits from close economic relations with its Arab neighbor in the face of immense pressure by Washington to disrupt Tehran-Baghdad ties, an analyst said.
Iraq has been facing a dilemma balancing ties with both Iran and the United States since tensions rose between the two states following the US withdrawal from the 2015 nuclear deal in May.
The neighbor aims to create a maintain relations with its second top trade partner and its influential western ally that is demanding other countries cut their dealings with Iran.
Amid Tehran-Washington conflicts, Iraq may take account of Iran’s benefits and losses, but is inclined to focus on its own interests, Mohammad Qoli Yousefi, an international economy expert, said.
“Under the present conditions, there are no fixed friends and foes, but countries develop their … relations with each other based on the situation on the ground,” he said in a recent interview with the Iranian Diplomacy news website.
At this point, he added, the issue is not Iraq, but Iran’s behavior that could leave its partners with no choice but to break off ties.
Need for Self-Examination
“Instead of questioning Baghdad’s measures, we need to review and analyze our own policies toward this country as well as the US, which have laid the groundwork for Iraq’s sanctions against Tehran,” he said.
The expert was referring to recent restrictions introduced by the Iraqi government on two Iranian enterprises, Sina Bank and Bahman Motor Company, as well as the ban on providing US dollars to Iraqi citizens heading for Iran.
Paradoxically, during the Iraqi president’s recent visit to Tehran, the two countries agreed on plans to increase mutual trade by up to $20 billion.
Yousefi pointed out that Iraq does not appear to be completely and definitely aligning itself with the US, but is “putting on a show of taking measures to satisfy the White House”.
A solution to maintain trade relations between Iran and Iraq, which currently amounts to $12 billion, is to conduct the transactions in national currencies.
Although the two countries have taken steps toward conducting trade on a rial-dinar basis, the future of this method is uncertain given Iran’s refusal to approve laws to comply with international financial standards, including the requirements set by the Financial Action Task Force, an inter-governmental organization that supports countries combating money laundering and terrorist financing.
Yousefi said the controversy that some factions in Iran have created over these laws has put Iran in such a precarious position that even its ally has been compelled to impose sanctions against it.
“Even if Iraq sorely needs its trade relations with Iran, it is likely to gradually lower bilateral business as the costs of such a partnership are on the rise due to [some ill-advised] policies on the part of Iran,” he said.
