Iraq’s import tariff hike not aimed at Iran
In recent days, reports have cropped up across various media outlets and social networks, claiming that the Iraqi government has slapped hefty tariffs on Iranian exports. Some economic actors further claimed that this move has thrown a wrench into the trade flow between the two countries, even bringing some shipments to a standstill at the borders.
However, the Iran Trade Promotion Organization has pushed back against claims that these tariffs are solely targeting Iranian goods, clarifying that Iraq’s actions fall in line with its policies to support domestic production. These tariffs, it was stated, are being rolled out for all countries, depending on the type of product and Iraq’s production capacity.
Farzad Piltan, advisor to the head of the Iran Trade Promotion Organization and his assistant for international affairs, spelled out the dimensions of the issue and the options available to Iranian exporters.
Piltan noted that Iraq backs up its domestic producers by raising import tariffs on goods that can be produced locally. This policy covers a wide range of products, including plasticware, disposable goods, and agricultural products. For agricultural goods, tariff support is phased in seasonally, and this measure is meant to be supportive rather than restrictive.
He went on to stress that during periods when Iraqi domestic production is sufficient, similar foreign goods are hit with high tariffs or even a temporary import ban.
Tariffs fluid, tied to
Iraq’s production capacity
Citing the experiences of some Iranian exporters who have recently run into higher tariffs at the Iraqi border, Piltan explained that exporters sometimes find themselves facing sudden tariff hikes. However, these increases are applied across the board and are not unique to Iran. For instance, an exporter of chocolate also came up against this issue.
The advisor further emphasized that Iraq’s import tariffs vary depending on the product, its domestic production rate, and its market share. For example, if a product is fully produced in Iraq, the import tariff may go up significantly. But if only 30% of the market demand is met domestically, the Iraqi government sets a lower tariff to allow the rest to be covered by imports.
Advice to exporters
He also pointed out that one of Iraq’s goals is to draw in foreign investment. Iraq is encouraging foreign exporters, including Iranians, to shift from pure export to investing and producing within Iraq. This approach can drive down costs and allow investors to take advantage of the incentives offered by the Iraqi government.
Piltan stated that Iranian companies wishing to hold onto the Iraqi market can branch out by pursuing joint production, technology transfer, or setting up production units inside Iraq. These strategies not only cut tariff costs but also shore up bilateral economic ties.
Tariff hikes, import bans nothing new
Abdolamir Rabihavi, director general of the West Asia Office at the Iran Trade Promotion Organization, emphasized that Iran’s approach has always been based on engagement, dialogue, and following up through Iraq’s Ministry of Trade. “After the necessary reviews, the issue is passed on to Iranian producers and exporters so they can make informed decisions about their business activities,” he added.
It is worth noting that officials at the Trade Promotion Organization have underscored that the Iraqi market remains a top export priority for Iran. Economic actors can capitalize on opportunities by investing directly, forming joint ventures, or setting up agencies and factories in Iraq, thereby driving down expenses and benefiting from the legal support of the Iraqi government.
The article first appeared in Persian on Mehr news agency.