The Export Development Bank of Iran (EDBI) has agreed to cover millions of US dollars worth of letter of credit (L/C) transacted trade with Iraq.

The two countries are currently exploring avenues for expanding bilateral trade and recognise the key role L/Cs could play in boosting imports and exports.

Trade expansion

Iraqi finance minister Abdil Abd al-Mahdi met in January with Iranian commerce minister Mohammad Shariatmadari in Tehran to discuss ways to expand bilateral trade exchanges.

Shariatmadari stressed the importance Iran attaches to trade with Iraq and said he would be keen to sign free trade agreements, establish areas of inter-bank co-operation and encourage trade through border markets.

The Iranian minister noted that government guarantees would be needed in both countries to open L/Cs and said EDBI has agreed to cover L/Cs worth US$300 million dollars.

Low volume

Al-Mahdi said that the volume of trade exchanges between the former adversaries was at a very low level and called for a boost in trade co-operation. He said that Iraq should use Iranian engineering and construction expertise in the war torn country's reconstruction efforts.

The Iraqi official added that rectifying the investment law, insurance law and independence of the Iraqi Central Bank, adopting certain laws for the activities of foreign countries' banks in Iraq and the establishment of official export-import gateways were among the measures addressed by Iraqi officials.

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