US President Donald Trump’s decision to withdraw the United States from a 2015 international nuclear accord with Tehran in May and reimpose sanctions has put Abdul Mahdi’s incoming government in a difficult position, since Iraq’s economy is closely intertwined with neighboring Iran’s, Reuters reported.
“We want to secure Iraq from any interference in issues, affairs of other countries, whether it’s a neighboring country or it’s any other country in the world,” Abdul Mahdi told a news conference in Baghdad.
The United States and Iran, increasingly at odds, are Iraq’s two biggest allies, and Washington has said there will be consequences for countries that do not respect the sanctions.
In August former Iraqi prime minister Haider al-Abadi said Iraq was against the sanctions “as a matter of principle”.
Baghdad called US sanctions on Iran "wrong and unacceptable", pledging that it would never accept the “cruel” measures. Abadi had initially said that his government would only respect the dollar ban in transactions with Iran.
Abadi later called the sanctions “unilateral” and “oppressive”, saying that Iraq would not be “part of a blockade” due to its own painful experience with international sanctions during the era of Saddam Hussein.
Abadi’s government later asked Washington for permission to ignore some sanctions on its neighbor. Abdul Mahdi did not say on Thursday whether his government would continue to seek the exemptions.
Iran is a source of assorted goods ranging from food and agricultural products to home appliances and car spare parts to the neighboring Arab nation, with annual trade standing at more than $12 billion.
The Islamic Republic is pushing forth with a 2025 vision plan to raise its exports to Iraq to $20 billion a year despite US pressures on Baghdad to keep Tehran at its arm’s length.
A few weeks ago, Iran’s business adviser at the country’s embassy in Baghdad was quoted as saying that the Islamic Republic was already ahead of its plan, with non-oil exports currently standing at $4.5 billion.
“Based on the average growth rate of 8.5% of non-oil exports and the realization of about $4.5 billion worth of these exports, we can say that we are 28% ahead of our export targets to Iraq,” Nasser Behzad said.
Iran is currently Iraq's top trade partner, with annual turnover of about $12 billion, according to Iraqi officials. By comparison, annual trade between Saudi Arabia and Iraq stands below $6 billion.
Foodstuff, livestock, construction materials and plastic products constitute the bulk of Iran’s exports to Iraq. Iranian vehicles and food items are a ubiquitous sight in Iraq.
Iraq is also the biggest importer of electricity from Iran. The country was hit by a series of protests amid electricity shortages this summer.
Abdul Mahdi was speaking at his first news conference since being sworn in just past midnight on Thursday. He also announced that he would be moving the prime minister’s office and cabinet outside Baghdad’s heavily fortified Green Zone.
“All of Iraq should be a green zone. Security and beauty should be everywhere in Iraq. Officials must share everything with citizens, the good and the bad. We should share everything with our people.”