Exports to Iraq
to pay duties

Leaves Greater Arab Free Trade Agreement

Custom duties on local agricultural and industrial exports to Iraq are now being levied, according to Iraq’s commercial attaché Yasser El Zobeidi.

“Our Council of Ministers took the decision to leave the Greater Arab Free Trade Agreement (GAFTA) and start imposing custom duties on incoming merchandise two months ago,” he said.

According to El Zobeidi, Iraq’s decision is due to its “very weak and dwindling capacity to export.” He said that since the decision was enacted, local exports to Iraq have not been affected.

This was confirmed by Naim Khalil, Chairman of the Syndicate of Fruits and Vegetables Exporters. He said: “Iraq is a very important export market for us. We will continue to export regularly even though custom duties are being applied.”

Iraq is one of the very few countries where the trade balance is in favor of Lebanon. Total exports to Iraq reached $162 million versus imports of $4 million in 2016, according to Customs.

Exports to Iraq mainly focus on fruits and vegetables, beverages, electrical machinery, cosmetics, and paper products such as books and papers.

Khalil said: “Iraq represents ten percent of our market. We have exported around 40,000 tons of different fruits and vegetables last year.”

According to information on the Iraqi Customs website, duties on fruits and vegetables range between ten and 30 percent: Ten percent on industrial machinery, five to ten percent on cosmetics, and ten to 15 percent on dairy products.

There has not been an official local stance regarding Iraq’s decision.

El Zobeidi said: “We have asked Arab countries to act as they see fit, whether it is through reciprocity or through the imposing of certain custom duties on our goods.”

Ever since land crossings through Syria were closed, exporters have been sending their goods to Iraq through the sea using Mersin port in Turkey and then overland via trucks.

“This route is costing us at least double the price and triple the time it used to take us,” Khalil said.