US and Iraqi officials sign economic aid and development agreements(13/07/05)

After meeting for two days, US and Iraqi officials signed several agreements on Sunday to revive economic relations, facilitate assistance and pave way for the construction of Iraq. "We had excellent meetings. We discussed a wide spectrum of issues dealing with many sectors and reached good conclusions on all issues raised," said Iraqi Finance Minister Ali Allawi, who co-chaired the meetings along with US Undersecretary of State Robert Zoellick.

The agreement establishes the legal framework for long-term US assistance

Key topics tackled at the meetings "included macroeconomic and structural reform, Iraq's national development strategy, the energy sector, the agricultural sector, private sector development, job creation and trade issues including WTO accession and US trade assistance policy," stated the joint communique of the meetings.

Regarding a promised $18.4 billion assistance to Iraq, officials from both sides signed a "bilateral assistance agreement" that "establishes the legal framework for a long-term US development assistance partnership with Iraq."

Allawi said that these funds will contribute greatly to constructing Iraq. However, "the feasibility of projects now is lessened by the security situation, so the effect of assistance and construction projects will only show in the long-term," he added.

Another agreement related to public sector development and job creation was signed to provide risk insurance and loan guarantee financing programmes available to private US investors wishing to invest in Iraq.

The agreement also envisages the establishment of a USAID-funded 'Investment Promotion Agency' to attract both Iraqi and foreign investors to open businesses in Iraq. A 1987 commercial, economic and technical cooperation agreement was also revived between both countries "to promote private business opportunities by establishing trade offices and information exchanges between industry groups in both countries."

On the trade and investment front, a 'US-Iraq trade and investment framework agreement' was signed. The agreement establishes a joint US-Iraq council to expand trade and investment ties.

Meetings between the Iraqi oil and electricity ministries and the US departments of energy and state, "covered issues such as Iraq's natural gas utilisation for power generation."

"The Iraqi side welcomed President Bush's 29 June announcement expanding duty-free trade benefits in the US under the generalised preferences to include dates ...the two sides discussed measures to further develop Iraq's dates industry through USAID's $100 million agricultural assistance programme, as well as steps to ensure Iraqi dates exports meet US sanitary and phyto-sanitary requirements," stated the communique.

"The relations between the US and Iraqi governments have strengthened after liberation as the US deals with us on the basis that we have full sovereignty," Allawi told the press.

Source: MENAFN