ARAB-AFFAIRS - Jan. 31 - Iraq Sees Expanding Economic Ties With Jordan.

Iraq's trade minister Mohammed Mehdi Saleh says he expects his country's business ties with Jordan to expand this year, thanks to a renewed trade agreement clinched under Iraq's UN oil-for-food programme. The minister tells a group of industrialists: "The outcome of the trade protocol will result in a positive improvement in ties in 2000". (Jordan depends on Baghdad for oil, which it obtains under UN sanctions in exchange for food and medicine. Since the 1990-91 Gulf War, in which Amman sympathised with Iraq, the latter has exported some 80,000b/d of oil to Jordan. To reach the latest energy agreement, Amman was forced to raise by US$100m to US$300m the amount of goods it exports to Iraq. Iraq insisted on raising the pricing formula underpinning the deal to US$19 from US$13.50/b in light of a sharp increase in world oil prices since Mar. 1999.) Saleh says the protocol's higher ceiling helped Baghdad expand its bilateral trade exchanges beyond 1999's US$750m level. He says: "We hope trade ties will go back to the pre-sanctions level". Saleh says Jordanian exporters clinched deals worth US$842m in the 6 phases of the oil-for-food programme, ranking 4th after France, Russia and China among 65 countries that exported to Iraq. But many of those agreements were delayed or blocked by the sanctions committee, which includes all 15 members of the UN Security Council. Saleh says the US has blocked humanitarian contracts under the distribution scheme. He says only about US$6 bn worth of goods reached Iraqis in spite of US$19.8 bn in oil exports. Saleh says: "The UN scheme has been exploited by Washington as a means to prolong sanctions on Iraq". (The oil-for-food programme allows Iraq to sell specified quantities of oil to buy food, medicine and other necessities to help offset the effect of sanctions imposed after its 1990 invasion of Kuwait.)