Iran and Iraq are moving to establish a barter system for goods and services as part of a broader push to overcome banking sanctions and bureaucratic hurdles and raise annual trade to $20 billion, a senior Iranian trade official says.
Yahya Al-e Eshaq, chairman of the Iran-Iraq Joint Chamber of Commerce, said in an article published by the Persian website of Iran Chamber of Commerce that despite significant economic potential between the two neighbors, current trade faces three major challenges: a lopsided balance heavily favoring Iranian exports, infrastructure and implementation bottlenecks, and the lack of a unified trade management body.
“The goal is to reach $20 billion in annual bilateral trade, but this depends on removing existing obstacles and activating both sides’ economic capacities,” Al-e Eshaq wrote.
He noted that most trade flows currently consist of Iranian exports, reflecting the competitiveness of Iranian goods and services in the Iraqi market. However, he added that identifying and activating Iraq’s industrial, agricultural, and production capacities could foster more balanced, long-term trade.
On infrastructure, Al-e Eshaq pointed to banking issues, guarantee letter problems, residency hurdles, absence of foreign exchange at Iraq’s central bank rate, underdeveloped ICT and digital product platforms, and insufficient credit trade infrastructure as key barriers. Some stem from sanctions, others from restrictive red tape on both sides, he said.
To address fragmentation among more than 22 government bodies operating at border terminals and markets, the joint chamber has proposed reviving a “headquarters for development of economic relations with Iraq” to the Iranian first vice president.
Among strategic measures on this year’s agenda, Al-e Eshaq listed: creating and operating a barter system for goods and services with a secretariat based at the joint chamber; launching an investment secretariat to facilitate joint ventures; designing a financial settlement system between traders using intermediary financial institutions and a clearing house; and setting up an export acceleration center for Iraq while easing imports into Iran.