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Positive note on sanctions-busting through back door

Dear CASI member,

The following two articles are from the Daily Star in Lebanon.
URLs are included at end of each article.

Salwa de Vree,
Leiden, The Netherlands

Iraq seeks more free-trade deals

Dania Saadi 
Daily Star staff 

Iraq is trying to sign free-trade agreements with Jordan, the United Arab Emirates and Algeria to 
bypass the trade restrictions imposed by the five-year-old United Nations’ oil-for-food program, 
according to an Iraqi Trade Ministry official. 
“Now that we have signed free-trade agreements with Syria, Egypt and Tunisia,” said Hadi Taleb 
Ibrahim, head of the state-run Iraqi import-export firm at the ministry, “we want to close similar 
deals with the UAE, Jordan and Algeria.” 
Iraq has already created a four-way free-trade agreement with Libya, Syria and Egypt, and is 
seeking other Arab states to join the arrangement. 
These free-trade agreements will supplement Iraqi trade under the oil-for-food program, which 
restricts certain imports. 
“Our free-trade agreements will allow us to provide the public and private sectors with all kinds 
of commodities, some of which cannot be provided under the oil-for-food program,” Ibrahim told The 
Daily Star on Monday. The official is in Lebanon to oversee an Iraqi trade fair in Beirut Hall at 
Sin al-Fil. 
The United Nations, which has to approve every contract signed under the oil-for-food program, has 
blocked the import of items ­ such as lead pencils ­ which could supposedly be used to manufacture 
Ibrahim said that Lebanon had much to gain from a free-trade agreement with Baghdad, particularly 
through importing materials that are not approved under the UN program. 
“Iraq has what Lebanon needs,” he said.“particularly fertilizers, barley, and oil.” 
Iraqi Trade Minister Mohammed Mehdi Saleh has accused the United Nations of blocking a $10 million 
Iraqi oil shipment to Lebanon, which was donated by the Iraqi government following Israeli raids 
here in 2000. 
A free-trade deal with Iraq would scrap tariffs on both agricultural and industrial goods, which 
can be as high as 200 percent on some Lebanese food exports, according to the Economy and Trade 
A free-trade agreement with Iraq would be Lebanon’s fifth, according to the Economy and Trade 
Ministry. A signatory of the Greater Arab Free Trade Area, Lebanon has finalized free-trade 
agreements with Syria, Egypt, Kuwait and the UAE. But most of these agreements include several 
restrictions which are unlikely to emerge in the Iraqi-Lebanese free-trade pact. 
The only snag to a Lebanese-Iraqi trade agreement appears to be transportation costs, which would 
be higher compared to commerce with Jordan and Syria. 
“Shipment costs of a ton of goods to Syria or Jordan are between $12-$15,” said Ibrahim, “but to 
Lebanon it goes up to $25.” 
He added that Lebanese products, which are generally more expensive than Egyptian or Syrian 
products, would nonetheless find a robust market in Iraq. 
“The first goods the Iraqis were introduced to under the oil-for-food program were from Lebanon,” 
said Ibrahim. 
Lebanon was the first Arab country to resume trade with Iraq under the program. 
“Many deals with Iraq were signed in the wake of the numerous trade fairs held in Lebanon and Iraq 
since 1997,” said Ibrahim. 
Last year, Lebanon was the venue of the Iraqi firm’s first trade since the sanctions were imposed. 
This year’s fair is three times larger and could be followed in 2002 with two more. 
DS: 25/07/01

Businesspeople keep Iraqi trade fair on itinerary 
Threat of US military action proves no deterrent 
Dania Saadi 
Daily Star staff 
Fears that the US-led military campaign against international terrorism will include Iraqi targets 
won’t stop local businessmen from attending Baghdad’s International Trade Fair this November or 
courting Iraqis with a lucrative free-trade agreement. 
Over 80 companies will take part in the annual commercial expo, which gives foreign participants 
access to the rich-but-sanctions-hit Iraqi market. 
“All preparations are going ahead as planned and no one has retreated so far,” said Fares Saad, 
organizer of the fair’s Lebanon booth.“None of the European countries have pulled out, either. 
Germany, Italy and Britain are busy putting up their stalls,” he added. 

Around 50 countries are participating in the 14-day fair, even though UN administrators will 
monitor most transactions to ensure they comply with the UN-brokered oil-for-food program. Despite 
the sanctions, however, a number of Iraq’s top Arab trade partners have continued to strike 
lucrative deals by way of bilateral free-trade agreements that skirt both the UN’s quota system and 
Iraqi tariffs. 

Lebanese businessmen have been urging Beirut to finalize a similar agreement before the government 
loses more ground to countries such as Egypt and Saudi Arabia. 
Despite its longstanding rivalry, even Syria is expected to make more than $1 billion from trade 
with Iraq, which is also pumping cheap oil to Damascus. Lebanon, which lived off cheap Iraqi crude 
oil prior to the Iran-Iraq war in the 1980s, is now in danger of losing its small $100 million 
annual share of the prize. “Either we get a package deal or we get nothing at all,” said Ahmad 
Kabbara, head of the export department at the Lebanese Industrialists’ Association. “We should look 
at Iraq as one big file that includes the possible rehabilitation of our two oil refineries, 
railroad network and the two-way exchange of goods.” 

Kabbara and other industrialists have lobbied the government to revitalize trade with Iraq, which 
frowns on Lebanon’s indifference to previous agricultural, trade, and oil agreements between the 
two countries. 

“We can’t sign a free-trade agreement if two-way trade is not activated. We are hoping that at 
least one minister will make it to the Baghdad fair to bolster our case,” said Kabbara. 
To date, the government has only made halting steps to win over the Iraqis, who already have 
free-trade agreements with former foes such as Syria and Egypt. 
DS: 18/10/01


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