Iraq plans to enact a business-friendly customs code and expects to join the World Trade Organization (WTO) within two years despite the violence damaging its economy, the Iraqi trade minister said.
The government began formal negotiations with the WTO in May and is committed to changing laws that contradict the organization’s rules, Abdul Falah al-Sudani said.
“By 2008-2009 I expect that Iraq will be a full-fledged member,” said Sudani, who is accompanying Prime Minister Nuri al-Maliki on a visit to Damascus to discuss improving political and economic ties with Syria.
“We have already received four queries about a number of regulations on the books and the ministries concerned are preparing a response,” he said in an interview.
Sudani said the new tariffs, which will be WTO compliant, will average 5-15%.
“We don’t want high rates. They may help shield local industry but will also isolate us economically,” he said, adding that there are several legislative hurdles to pass before the new code becomes law.
Iraqi currently levies a flat five percent “reconstruction fee” on imports. The US-led occupation administration, which took control of Iraq in 2003, scrapped the Saddam-era customs system.
Central bank figures show Iraq’s imports fell to $20.9 billion last year compared with $23.5 billion in 2005. Exports, primarily of oil, rose to $30.5 billion from $23.7 billion over the same period.
Iraqis were among the Middle East’s most affluent consumers before the United Nations imposed crushing sanctions in 1990 for the invasion of Kuwait by Iraq under Saddam Hussein.
Looting after the US-led invasion in 2003 destroyed Iraq’s industrial base further, although an end to sanctions in the same year and more liquidity in the economy drove up demand for consumer goods.
“Many of our factories are idle and Iraq is importing everything from food to electrical equipment. Even if our production is restored, Iraq by nature is a large regional consumer market,” Sudani said.
Traders who met the minister on his visit to Syria said lack of security is the major factor hampering trade, but that streamlining regulations could boost the flow of goods. (Reuters)