Iran-Iraq trade reached $12 billion in 2013

Iran and Iraq have enjoyed one of the most stable trade relations in the region, with 2013 numbers expected to double in the coming few years.

al-monitor A view from the Iraqi side of the Wasit, Iraq-Iran border crossing, 120 km (74 miles) southeast of Baghdad, Nov. 17, 2007.  Photo by REUTERS/Erik de Castro.

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regional trade, iran-iraq relations, industry, imports, exports, business

Jul 1, 2014

The head of the Iraqi Chambers of Commerce and Industry, Jaafar al-Hamdani, announced that the volume of trade exchange between Iraq and Iran reached about $12 billion last year, pointing to the possibility of doubling this figure in the coming years.

The Baghdad Chamber of Commerce discussed the economic situation between Iraq and Iran, and the mechanisms of activating trade and benefiting from the commonalities between the two countries. Hamdani issued statements to media outlets on the sidelines of [bilateral] meetings indicating that “economic relations between the two countries is one of the best relations, as the trade balance hovers around $12 billion per year, 50% of which does not rely on the oil industry, and this is an important indicator for the two parties.” He added that “the meeting between the Chamber of Commerce and the commercial attaché at the Iranian Embassy in Iraq covered mechanisms to activate the laws in force in the two countries on strengthening coordination and performance in this field.”

An official source at the Ministry of Planning provided Al-Hayat with the latest report on Iraqi trade balance, showing that in 2013 the total value of exports reached $94.2 billion, compared to $56.2 billion for the total value of imports. The report also indicated that the current account registered a $32 billion dollar maximum ceiling, with a current account to GDP ratio of 12.88%.

Nora Salem, a member of the Parliamentary Economic Committee, confirmed to Al-Hayat that the volume of trade with Iran will register a significant rise this year in light of the security situation and closure of the trade exchange route between Iraq on one hand and Turkey, Syria and Jordan on the other. Salem added “Iranian products will thrive this season in the [Iraqi] local markets and the Turkish industry will be the most prejudiced as they lost the Iraqi market due to the security situation.”

Regarding the weakness of Iraqi exports, Salem asserted, “We cannot determine what happens to the trade balance. States use similar measurements to tell the difference between the value of their exports and their imports. In the case of Iraq, if we exclude oil, the trade balance would be limited to the importation of various goods.” She pointed to simple non-oil products exported via the private sector, such as dates, vegetables, animal oils, wool, leather and some raw materials. “Their combined value barely accounts to 1% of the GDP,” confirmed Salem.

It is worth mentioning that Iran announced through the assistant chief of “Iran Khodro” Industrial Motors for International Affairs, the inauguration of the sixth factory for the production of cars out of the country, pointing out that the group will produce about 20,000 cars per year in Iraq. The latter explained that Iran's new car factory will be constructed in the city of Alexandria, south of Baghdad, and was designed in collaboration with the Iraqi company Zam Zam Spring.

He indicated that Iran products in Iraq include three kinds of cars — Samand, Soren and Rana — and that the factory will produce 60 cars a day in Iraq. The assistant chief pointed out that Iran exports about 100,000 cars to the Iraqi market where there are shops providing after-sales services for Iranian cars in Baghdad, Karbala, Najaf and Basra.

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