Turkish exporters are reeling from an unprecedented blow in trade with Iraq that has splashed cold water on Ankara’s hopes to launch a second border crossing with its southern neighbor and boost bilateral trade to $20 billion. 

In a series of steps since May, touted as an effort to promote domestic production, the Iraqi government has restricted food imports from Turkey, including in major categories such as eggs and beverages. Turkey’s business community suspects that there are political factors behind the move, including the role of non-market actors harming competition, pressure from companies linked to the ruling partners in Baghdad and the influence of Iran.

Turkey’s trade volume with Iraq amounted to about $13 billion last year. Iraq was the fourth largest buyer of Turkish goods, with $8.4 billion worth of imports. Some 12,000 Turkish companies sell goods to Iraq. 

Baghdad’s first step on May 1 barred the importation of eggs from Turkey, leaving Turkish producers in a tight spot. Last year, 71% of Turkey’s egg exports went to the Iraqi market, meeting 76% of Iraq’s consumption.