Iran signs new trade and energy deals with Iraq

Agreements reinforce the close connections between the two majority Shia countries

Close ties: Iraq’s prime minister Adel Abdul Mahdi  with Iranian president Hassan Rouhani in Baghdad. Photograph: EPA/Ahmed Jalil

Close ties: Iraq’s prime minister Adel Abdul Mahdi with Iranian president Hassan Rouhani in Baghdad. Photograph: EPA/Ahmed Jalil

 

Iranian president Hassan Rouhani will conclude his first official visit to Iraq on Wednesday after signing agreements on energy, trade and the construction of a railway linking the neighbours.

These deals reinforce the close connections between the two majority Shia countries and defy the Trump administration, which has stepped up pressure on Baghdad to reduce ties to Tehran and abide by the punitive US sanctions regime.

“We want to forge very close relations with Iraq. We do not seek to be allied against others, but rather seek to invite other regional states to be in our alliance,” Mr Rouhani said after meeting his Iraqi counterpart Barham Salih.

Mr Rouhani discussed joint economic projects and co-operation against terrorism with prime minister Adel Abdul Mahdi, whose coalition includes Shia parties tied to Iran.

Dependent on Iran for electricity, fuel, food and pilgrimage revenues, Iraq cannot afford to shun Tehran or capitulate over US sanctions. An official in Mr Rouhani’s high-profile delegation told Reuters that Iraq is a “channel for Iran to bypass America’s unjust sanctions imposed on Iran. This trip will provide opportunities for Iran’s economy”.

While the two countries seek to grow trade from $12 billion to $20 billion a year, the balance is weighted in Iran’s favour due to oil and natural gas exports.

Iran has been trying to expand commercial relations with Iraq and Turkey, its largest trading partners, following the blows to its economy delivered by the US reimposition of sanctions after its withdrawal from the 2015 nuclear agreement.

Mr Rouhani’s high-profile three-day stay in Iraq contrasted with the three-hour secret visit last December by US president Donald Trump to troops based at an Iraqi airfield. He met no one from the Iraqi government, alienating senior political figures.

Mr Trump later said the US, which has 5,200 troops in Iraq, could use Iraqi bases to “watch” Iran, outraging both Baghdad and Tehran. Even if he had not made these blunders, Mr Trump could never have hoped to distance Baghdad from Tehran.

Popular protests

Mr Rouhani, a middle-ranking cleric, began his visit at prayers at al-Kadhimiya mosque, a revered Shia shrine in the capital, and wound up with a pilgrimage to the Shia holy cities of Kerbala and Najaf, where he met highly respected Grand Ayatollah Ali Sistani, Iraq’s senior Shia cleric. This journey reminded Iraqi Shias of their deep religious connection with Iran.

Iraqi Shia politicians have long-standing political ties with Iran. Many took refuge in Iran when Iraq’s secular government cracked down on the Shia fundamentalist Dawa party when it mounted an armed insurgency. After 1979, Dawa was backed by the revolutionary regime in Iran, precipitating an eight-year war with Iraq.

Iraq is indebted to Iran as well as the US for crucial support in the war against Islamic State, also known as Isis. Pro-Iranian Shia militias played a leading role in ground operations while Iranian experts trained the Iraqi army, and Revolutionary Guards major general Qassem Soleimani provided logistical advice to Iraq’s high command. Leaders of these militias are now members of Iraq’s parliament.

Both governments face popular protests over economic hardship, mismanagement and graft and seek relief through trade and co-operation.

While Iraq has recovered from the Iran-Iraq war, the 1991 and 2003 US wars on Iraq devastated the country and bequeathed a legacy of sectarianism, rampant corruption and strife.