Despite Washington’s unilateral sanctions on Tehran, trade transactions between Iran and Iraq will continue its increasing trend in coming months and is predicted to reach $10 billion by March 2020.
Speaking in an exclusive interview with Iran Daily, Iraj Masjedi, the Iranian ambassador to Baghdad, added Iraq is Iran’s first export destination.
He noted that currently, Iran, Turkey and China account for the biggest share of the Iraqi market respectively.
Iranian products are quite popular in the Iraqi market in view of their high quality and reasonable prices, the Iranian envoy said.
He noted that in addition, Iraqis have easy access to Iranian products through kilometers of common border between the two countries.
The ambassador said trade balance between the two neighbors is in Iran’s favor.
He put non-oil trade between the two countries at $9 billion, noting that the figure stands at $13 billion if Iran’s energy exports, comprising gas and electricity, to Iraq are also included.
Masjedi said Iran annually exports 1,200 megawatts of electricity to Iraq directly, adding the Arab country generates 2,000 megawatts of power per year using the gas it imports from Iran.
“On the whole, Iran annually exports a total of 3,200 megawatts of electricity to Iraq either directly or indirectly.”
Commenting on the two sides’ vision for raising annual trade with each other, he said as stipulated by both countries’ officials, bilateral transactions are expected to amount to $20 per annum as part of a five-year plan.
“I am convinced that this target is quite achievable through drawing up an appropriate plan.”
In addition, he said, 82 Iranian firms are currently involved in the field of providing techno-engineering services in Iraq, having signed contracts worth $11 billion with Iraqi employers.
“These contracts are in the fields of building hotels, wastewater treatment facilities and power plants [in Iraq].”
Masjedi noted that Iran is building a number of power plants in different parts of Iraq, the biggest one of which is under construction in the northern part of Basrah.
He said the power plant has a capacity to generate 3,000 megawatts of electricity per year.
“At present, the plant has become partly operational, generating 450 megawatts of electricity per year which is supplied to consumers through the nationwide power distribution network. The plant is expected to be completely constructed in 18 months.”
He put the value of the contract to build this power plant at $2 billion.
Shifting to US unilateral sanctions on Iran, the ambassador said they have failed to have any considerable negative impact on the two neighbors’ economic ties with each other, as the Iraqi government does not intend to abide by them.
Iraqis say they cannot accept to abide by Washington’s sanctions on Tehran as they need Iran for meeting their energy, particularly electricity and gas, needs and import other products from the country.
“They say US officials cannot compel us to abide by the sanctions. We have to continue our transactions with Iran.”
Iraqi officials are in constant negotiations with the US to extend their waiver from the sanctions on Iran and be able to continue importing electricity and gas from their eastern neighbor, he said.
“They renew their waiver for importing Iranian electricity and gas every three months.”
Turning to the banking and monetary transactions between the two neighbors under the sanctions, Masjedi said Iran and Iraq have eliminated the dollar from their trade with each other to resolve the problems.
“A major part of our transactions are carried out using the dinar and euro. As per an agreement reached between the Central Bank of Iran (CBI) and Iraqi officials, the former has opened a number of accounts in Iraq in which payments by Iraqi importers are deposited.”