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Iraq - Trade and Diplomatic Relations with the EU

Individual Level

Pre – Invasion

France

Iraq's biggest trade partner and political backer in the EU during Saddam Hussein's time was France. At least 40% of Iraq's Armed forces was equipped with French weaponry. So much so that during the allied invasion of Kuwait, the allied forces asked France to stop its Mirage fighter operations for the fear of mistaking them for Iraqi operated French supplied aircraft. French companies were also very heavily involved in Iraq's construction and energy sector. France's head of Atomic Energy (who incidentally was Jaque Chirac) in 1975 signed an agreement with Saddam Hussein for the supply of Nuclear power equipment. Despite the equipment's destruction by an apparent Mossad operation in France, Paris supplied exact replicas free of charge to Iraq which were later destroyed by an Israeli attack in 1981. French oil firms were awarded a number of lucrative Iraqi oil contracts in return for France's support of Iraq.

Italy

The Italian government had close economic relations with Iraq, especially during Saddam's war against Iran. Italian arm manufacturers supplied training jets to the Iraqi Air force whilst Italian Banks supplied generous credits to the Iraqi government for the purchase of weapons. Italian energy companies were also involved in Iraq's oil sector.

Post invasion

United Kingdom

The UK was one of the main opponents of the Saddam regime and as a result was the biggest military contributor to the allied invasion of Iraq. Since then a number of UK companies have entered the Iraqi market focusing on reconstruction efforts. At the same time Iraq's military forces are currently being trained by UK forces whilst Iraq's new civil service is receiving training from its UK counter parts. The UK is also one of the biggest providers of aid to the newly established Iraqi government.

Entity Level

Pre invasion

According to the EU, the European Union was an important political and economic partner of Iraq 's. In 2001, the EU accounted for 55% of Iraqi imports. Goods and services traded between the two entities were Agricultural products, energy, machinery, transportation material, chemical products and textiles and clothing. Figures for the year 2001 show total of 3.554 Billion Euros of Iraqi exports to the EU, and 1.632 Billions Euros of EU exports to Iraq . The balance in this case was in Iraq 's favour due to the sanctions placed in Iraq forbidding sale of a wide number of goods to the country.

Post Invasion

In 2003 and 2004, the EU provided EUR 300 million for humanitarian aid and reconstruction in Iraq in addition to assistance earmarked by the member states in the EU budget. EU experts also supported preparations for the elections in January 2005 by training electoral observers and providing advice to the Iraqi Electoral Commission. The visit by Prime Minister Allawi to the European Council in Brussels on 5 November 2004 also underscored the role of relations between Iraq and the EU.

2003 saw a dramatic decrease in trade with the EU, a fall of around 45%. In 2004, the EU reported its exports to Iraq bounced back 47%, and its Imports from Iraq leaped back 63%. In 2005, exports and imports grew along more moderate numbers. Altogether, trade with Iraq , according to the EU, stands at 5.164 Billion Euro.

Fuel remains about 99% of EU imports from Iraq .

As for Exports, in 2005 the EU is the second largest exporter to Iraq , providing 22% of Iraq 's imports. EU exports to Iraq include mainly four groups of products: machinery (over 50%, large share being power generating machinery), food and live animals (10.6%), various manufactured articles (10.3%) and chemical products (6.8%).

By: Meir Javedanfar and Tal Gurevich

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