7.17.2005

Fact Sheet: IRAQ’S ECONOMIC BUILDING BLOCKS: Reviewing Progress

The U.S. – Iraq Joint Commission on Reconstruction and Economic Development

July 10-11
Amman, Jordan

The U.S.-Iraq Joint Commission on Reconstruction and Economic Development (JCRED) convened on July 10th and 11th to follow-up and build upon the progress of previous economic policy discussions between the governments of the United States and Iraq. The two countries decided to rename this the Joint Commission on Reconstruction and Economic Development reflecting the economic reconstruction and revival issues that will be the heart of our economic policy cooperation in the coming months and years. Ali Abd al-Amir Allawi, Iraqi Minister of Finance, and Robert B. Zoellick, the U.S. Deputy Secretary of State, served as the co-chairs of the interagency Iraqi and American delegations.

Among the tangible outcomes and issues advanced during the Joint Commission were:

Private Sector Development and Job Creation

-- The U.S.-Iraq Investment Incentive Agreement will stimulate private sector growth in Iraq by making Overseas Private Investment Corporation (OPIC) risk insurance and loan guarantee financing programs available to private U.S. investors wishing to invest in Iraq.

-- The Investment Promotion Agency, a new Iraqi government body established with U.S. government aid, is helping both Iraqi and foreign investors open businesses in Iraq.

-- The Commercial, Economic and Technical Cooperation Agreement of 1987 between the U.S. and Iraq was revived by the two sides. It promotes private business opportunities by establishing trade offices and information exchanges between industry groups in both countries.

Trade and Investment

-- The U.S.-Iraq Trade and Investment Framework Agreement (TIFA) establishes a joint U.S.-Iraq council to expand trade and investment ties.

-- President Bush’s June 29, 2005 announcement approved Generalized System of Preferences (GSP) eligibility for two tariff lines of dates. The GSP designation provides zero tariff treatment in the U.S. for Iraqi dates and will stimulate Iraqi’s date exports, which were the leading non-oil export prior to the 1990s.

-- The Iraqi Minister of Trade announced that Iraq has submitted the Foreign Trade Memorandum (FTM) to the WTO Secretariat. Next steps include establishing Iraq’s first working party to engage in multilateral discussions. Reforms required for WTO membership will revive Iraq’s economy, create jobs, and integrate Iraq into the global economy.

Assistance

-- The Bilateral Assistance Agreement between the U.S. and Iraq establishes the legal framework for a long-term U.S. development assistance partnership with Iraq.

Agricultural Sector

-- A Memorandum of Understanding on Agricultural Cooperation responds to an Iraqi request for technical assistance and capacity building to boost the productivity of Iraq’s agricultural resources. USAID and the U.S. Department of Agriculture are implementing $106 million of aid to modernize agro-business credit services, train Iraqi farmers and veterinarians, build new date palm plantations, and introduce new strains of wheat and other cereals

Energy Sector

-- US-Iraq Bilateral Energy Consultations were held between the Iraqi Oil and Electricity Ministries and the U.S. Departments of Energy and State, covering issues such as developing a needs assessment and Iraq’s natural gas utilization for power generation.

-- The U.S. Trade and Development Agency and the Iraqi Oil Ministry agreed on a training program for Ministry staff, addressing needs identified by senior-level Ministry of Oil officials.

Donor Assistance

-- Following up on the new international support for Iraq demonstrated at the June 21-22 Brussels Conference, the JCRED provided a forum for the ITG to consult with the USG in preparation for the upcoming International Reconstruction Fund Facility for Iraq (IRFFI) donor conference in Amman July 18 and 19.

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Source: International Information Programs, U.S. Department of State

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