Trade ties in focus as Iran's Rouhani begins first Iraq visit

[March 11, 2019]  By Ahmed Rasheed

BAGHDAD (Reuters) - Iranian President Hassan Rouhani condemned U.S. military intervention in the Middle East on Monday as he began a first official visit to Iraq, meant to bolster Tehran's influence and expand trade ties to help offset renewed U.S. sanctions.

His visit also signaled to Washington and Gulf Arab allies that, in the face of U.S. sanctions reimposed after the U.S. pullout from world powers' nuclear deal with Iran, Tehran still plays a dominant role in Iraqi politics.

Prior to his departure, Rouhani said Shi'ite Muslim Iran was determined to strengthen ties with its Shi'ite-led Arab neighbor, Iranian state television reported on Monday.

Those ties "cannot be compared to Iraq's relations with an occupying country like America, which is hated in the region," the semi-official Mehr news agency quoted Rouhani as saying before he flew to Baghdad. "One cannot forget the bombs that Americans dropped on Iraq, Syria and other regional countries."

During Rouhani's three-day visit a series of agreements will be signed in energy, transport, agriculture, industry and health, the Iranian state news agency IRNA said.

"We have the right conditions for cooperation in all areas, including trade and investment..., energy, electricity and gas, banking ties and cooperation on roads and railways," Rouhani told journalists after meeting Iraqi President Barham Salih.

"Iraq is an important state in the region and it can play a bigger role in providing security," he said without elaborating.

A senior Iranian official accompanying Rouhani told Reuters that Iraq was "another channel for Iran to bypass America's unjust sanctions ... this trip will provide opportunities for Iran's economy".

Iraq relies on Iranian gas imports to feed its power grid and has asked for extensions to a U.S. waiver to continue importing Iranian gas since U.S. President Donald Trump restored sanctions on Iran's vital energy sector in November.

Iraq's President Barham Salih walks with Iranian President Hassan Rouhani during a welcome ceremony at Salam Palace in Baghdad, Iraq March 11, 2019. REUTERS/Thaier al-Sudani

IRANIAN ECONOMY SUFFERING

The slump in Iran's economy since Trump's decision last May to pull out of the 2015 nuclear deal between Iran and six major powers has pushed the Islamic Republic to try to expand commercial ties with neighbors.

The 2015 agreement lifted sanctions that had been imposed by the United States, European Union and United Nations in return for Iran curbing aspects of its nuclear program.

The Trump administration said the accord was too generous and failed to rein in Iran's ballistic missile capabilities and its involvement in regional conflicts in Syria and Yemen.

Other signatories to the deal have been trying to salvage the pact, but U.S. sanctions have largely scared off European companies from doing business with Iran.

The Europeans have promised to help firms do business with Iran as long as it abides by the deal. Iran has itself threatened to pull out of the agreement unless EU powers demonstrably protect its economic benefits.

(Reporting by Ahmed Rasheed with additional reporting and writing by Parisa Hafezi in Dubai, John Davison in Baghdad; Editing by Mark Heinrich)

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