Iran ready to expand trade with Iraqi Kurdistan

Iran is ready to start technical negotiations with the Kurdistan region of Iraq over the opening of two important free trade zones following similar agreements made with Baghdad, the Iranian Consul-General in Sulaymaniyah told Rudaw on Saturday.

“We are ready and we have completed the preliminary work at both border crossings, namely Parvizkhan and Bashmakh, to establish these free zones,” Mehdi Shushtari stated.

“The legal procedure has finished, it has been approved and even the budgets have been allocated and we hope that the work begins in the near future,” he added.

Parvizkhan and Bashmakh are two important border crossings linking Iran’s Kermanshah and Kordestan provinces to the Kurdistan region of Iraq.

While the onset of the novel coronavirus brought trade between Iran and Iraq to standstill, trade largely continued between Iran and the Kurdistan region through these border crossings. The impact of the coronavirus pandemic has meant that trade level between Iran and Iraq will stand at around nine billion dollars this year - four billion less than last year.

Kermanshah alone has 371 km of land bordering the Kurdistan region and Iraq, with six border crossings and border markets.

“Last year, in total three billion dollars was the level of exports to Iraq and Syria...Kermanshah is the supplier of foreign currency to the country in relation to non-petroleum exports,” Hedayat Hatami, a top economic official in Kermanshah was quoted by IRNA as saying on July 23.

Iran’s trade volume with Iraq and the Kurdistan region has stood at around 13 billion dollars in recent years, just over half of which is through around half a dozen land border crossings with areas under the control of the Kurdistan regional government (KRG). Iranian officials, including President Hassan Rouhani, have repeatedly said that they want to increase the volume to 20 billion dollars in the coming years.

Tehran has paid particular attention to expanding its non-petroleum trade with neighboring countries since Washington withdrew from the Iran nuclear deal in May 2018 and reimposed sanctions on the country.

Shushtari spoke about several issues in the interview at Rudaw's studio, including the quality of goods entering Iraqi and Kurdish markets.

“As the Islamic Republic of Iran, the stability and the security of Iraq and the Kurdistan region is important to us, we see the stability of the region and Iraq as part of our own security and naturally in order to establish security in the border area, we do our utmost,” Shushtari said.

Last December, the heads of Iran and the Iraqi Kurdistan region’s customs administrations had expressed the two sides’ eagerness for the expansion of bilateral customs cooperation.

They made the remarks during a meeting on the sidelines of a workshop held by the Islamic Republic of Iran Customs Administration (IRICA) to train 27 employees of Iraqi Kurdistan’s customs administration in Tehran.

A memorandum of understanding was also inked by Mehdi Mir-Ashrafi, the head of IRICA, and Samal Abdulrahman Aziz, the head of the Iraqi Kurdistan region’s customs administration, in the same day.