Iraq is a religious country located in Southwest Asia, which has the most common border with Iran. In addition to the land border, this country also shares a border with Iran through the Persian Gulf. Having cultural and political commonalities between the two countries of Iran and Iraq has provided a suitable platform for bilateral relations with this country.
Geographically, the western part of Iraq is a desert and the eastern part has fertile plains. The country of Iraq has a long tradition and civilization in history, and this is the reason why a lot of ethnic diversity can be observed in this country.
The main part of Iraq's income and economy is dependent on oil and energy exports. According to statistics; This country is ranked fifth in the world in terms of having oil reserves. Before the US attack on Iraq, the ruling system of this country was socialist, but after the start of the civil war in 2003 and the effectiveness of the multi-party system, many problems were created for the Iraqi people and economy.
Currently; Political instabilities and successive changes of governments are the main factors in weakening Iraq's relations with other countries in the region. In the following; While referring to the political and economic situation of Iraq, we will examine the bilateral relations between Iran and Iraq in recent years and at the end we will discuss the problems and challenges faced by Iranian businessmen for exporting to Iraq.
The political and economic situation of Iraq
As mentioned at the beginning; The major part of the gross domestic product and the economy of Iraq is dependent on the annual sale of oil. So that only 5% of Iraq's income comes from the sale of non-oil products. With the start of civil wars and international sanctions, Iraq's oil sector faced many problems.
The ineffectiveness of the laws, corruption in the management system, technical problems in production, transportation, etc. have caused, in addition to the reduction in the price of Iraqi oil, the level of production and storage has also decreased. Currently; Iraq is facing the problem of meeting the basic needs of the people. The economic crisis and political instability in Iraq have so far displaced nearly 5 million native people of this country.
With more than 140 billion barrels of oil, Iraq is known as the center of the world's oil fields. Iraq supplies the government's annual budget through the export of crude oil to other countries. However, unlike the billions of revenues from the sale of oil, more than half of the people of this country are facing the problem of not having access to water and electricity.
Trade exchanges between Iran and Iraq
The relations and commercial exchanges between Iran and Iraq have always been accompanied by fluctuations. After the overthrow of the Iraqi Baath government; The relations between the two countries were in favorable conditions. The alignment of the two countries in political and cultural issues has provided a good basis for the export of Iranian goods. According to Iran customs statistics; The amount of exchange between Iran and Iraq has reached its highest level in the past several years, so that more than 9 billion dollars of non-oil goods were exported to Iraq in 1998 alone.
Currently also; The Iraqi market is the main target of Iranian businessmen. Due to the geographical and climatic conditions of Iraq, the cultivation of agricultural and summer crops in different regions of this country is very poor. Therefore, Iraq is facing the problem of supplying food and other agricultural products. During the past years; The supply of food products such as fruits, dried fruits, watermelons, wheat, summer vegetables, etc. from Iran has brought significant foreign exchange to Iraq.
The most important competitors of Iran's export goods to Iraq are countries including; America, China, South Korea and Turkey. In the meantime, Iran plays an important role in the supply of basic goods for the Iraqi people.
The low cost of transportation and customs tariff is one of the main reasons for the popularity of exporting goods to Iraq. Because only 20 kilometers away from Abadan city, Basra market is a good source for selling Iranian products. Currently; Major export items of Iran to Iraq; Agricultural products, household appliances, food, clothing and construction materials. Export of building materials including; Tiles, cement, ceramics, stone, etc. are very profitable in the Iraqi market.
Iraqi customs laws
right now; Iraq has more than 19 customs terminals, among which Zakho and Ibrahim Khalil terminals have better facilities. before starting the export process to Iraq; It is necessary for the exporter to first check the non-prohibition of goods entering Iraq and export duties by referring to the customs department. according to export laws; All export items must be in good condition in terms of quality and standard.
also; It is necessary for exporters of goods to be careful about inserting Latin and Arabic labels. Because according to the customs laws of Iraq, it is forbidden to write the description and date of the goods in Farsi language on the products, and if this is observed, the goods will be returned to Iran. Proper product packaging and basic product pricing are other important points in the discussion of exporting to Iraq.
The customs tariff imposed on Iraqi imported goods varies depending on the type of product. for example; The entry of essential items and basic needs of the market with a zero percent tariff, intermediate goods and other products are also calculated from 1 to 5 percent.
Challenges of exporting to Iraq
One of the main problems and obstacles for exporting goods to Iraq is the uncertain timing of opening or closing of border terminals and inconsistencies on the part of Iraqi authorities and relevant institutions. Also, the weak infrastructure of Iraqi crossings in terms of cargo handling, transportation, docks, goods control devices, etc., has caused the process of exporting goods to this country to be slow.So; It is necessary for Iraqi provincial officials to facilitate the process of development and import of goods by planning and removing obstacles as well as improving the existing infrastructure.