Global Tariff Tensions Pose Threat to Iran’s Export Markets

TEHRAN (Iran News) According to IRNA, during a forum on identifying export markets for industrial goods in Persian Gulf Cooperation Council ((P)GCC) countries, Amin Maleki stated that by the end of the Iranian year 1403 (March 2025), Iran’s exports to Iraq had reached $12 billion. This made Iraq Iran’s second-largest non-oil export destination after China, which accounted for nearly $15 billion.

Maleki highlighted Iraq’s strategic importance in Iran’s trade portfolio. He pointed out that while Iran exported $12 billion worth of non-oil goods to Iraq, Iraq’s exports to Iran stood at just $566 million. This trade surplus in Iran’s favor is five times larger than Iran’s surplus with Afghanistan, which ranks second in terms of trade surplus with Iran.

However, Maleki cautioned that this trade imbalance is unsustainable from Iraq’s perspective. As a country lacking an industrial production system, Iraq has shown little interest in signing preferential or free trade agreements with Iran. Instead, in recent years, Iraq has sought to diversify its trade routes and balance its trade by enhancing cooperation with other countries.

He stressed that one of the key strategies outlined in Iran’s development plans is to redirect trade flows from the United Arab Emirates to Iraq, especially in goods for which infrastructure already exists. Maleki also noted that due to new European Union import regulations—such as increased scrutiny on carbon border adjustment mechanisms—Turkey is emerging as another strong competitor in Iraq’s market, leveraging its strategic trade relations and aggressive marketing efforts.

During the same session, Mehdi Nejatnia, Iran’s former commercial attaché in Iraq and author of several trade guides on Iraq, emphasized the underutilization of trade infrastructure and the lack of Iraqi participation in the bilateral trade process. He explained that this has led to dissatisfaction among Iraqi citizens, particularly in border areas and the transport sector. They expect Iran to give them a greater share in the logistics of transporting goods into Iraq.

Nejatnia suggested that Iraq could also serve as a strategic hub for the re-export of goods needed by Iran. This would help reduce Iraq’s trade deficit with Iran and allow Iran to better use the foreign currency earned from gas and electricity exports to Iraq to fund essential imports.

He warned that without a change in trade policy, Iran’s access to the Iraqi market could face serious challenges within the next two years. Therefore, coordinated and unified policymaking is necessary across various decision-making bodies.

Nejatnia emphasized the need to implement a comprehensive roadmap for economic and trade cooperation between Iran and Iraq. He stressed that commercial priorities should be given as much weight as religious, military, and cultural ties to create a mutually reinforcing relationship.

He also advocated for identifying key areas for joint investment, establishing a robust trade command center, and ensuring the Iranian government plays a facilitating role in advancing private sector goals in Iraq.

Finally, he concluded that Iran has the capability to engage in multilateral investment projects in Iraq and to build industrial zones there. This would not only reduce the distance to key export markets but also increase Iraqi involvement and perceived benefits in bilateral trade.