Directorate-General for Trade

Iraq

The EU is a major trading partner for Iraq - second after the USA. Total bilateral trade amounted to over €10billion in 2008. This trade exhibits a huge surplus in favour of Iraq due to the fact that it sis dominated by oil imports, which make up 99.9% of all imports from Iraq into the EU. These exports account for almost a quarter of Iraq's total exports. The EU is the biggest source of Iraqi imports after Syria and Turkey.

The EU sees eventual closer trading ties as an important part of the reconstruction and development of Iraq. There is a very substantial potential for bilateral trade between the two economies and investment from the EU would have a highly beneficial effect on Iraq's development.

Commission strategy for Iraq

The European Commission's strategy for Iraq was set out in the 2004 Commission Communication "The EU and Iraq: a framework for engagement" , reinforced by the 2006 Commission Communication "Recommendations for renewed engagement with Iraq" .Both documents aimed to support Iraq's political transition to democracy and the establishment of a market economy. They also support Iraq's integration into the international community and within its region. In the area of trade, the Communication proposed the negotiation of a Trade and Cooperation Agreement (TCA) as an appropriate first step to develop a partnership between the EU and Iraq. As the EU has no contractual relationship with Iraq and Iraq is not a member of the WTO, trade between the two economies is conducted in accordance with our general import regime. Iraq requested WTO accession in September 2004 and the first meeting of the WTO Working Group on Iraqi accession took place on 25 May 2007. The EU is a strong supporter of eventual Iraqi membership of the WTO.

TCA Negotiations

Negotiating directives for a Trade And Cooperation agreement with Iraq were adopted by the Council in March 2006. The EU and Iraq are seeking to establish a trade regime which is WTO-compatible and which provides a transparent and predictable business environment that will help encourage trade and investment to Iraq. Since the launch of the negotiations in November 2006 eight rounds have had taken place, the last round took place on 25-27 May 2009 in Brussels.