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Trade Dominates Rouhani's First Official Visit To Iraq

Iraqi President Barham Salih, right, shakes hands with visiting Iranian President Hassan Rouhani, at Salam Palace in Baghdad, Iraq, Monday, March 11, 2019. Iranian President Hassan Rouhani arrived in Baghdad on Monday, making his first official visit to

Iranian President Hassan Rouhani is on a three-day visit to Iraq, seeking to bolster Tehran's influence in the neighboring country and expand commercial ties as Baghdad is under pressure from the United States to limit ties with Tehran.

During the first day of the visit the two sides signed several preliminary trade agreements, including a plan to build a railway linking the two countries.

Speaking at Tehran's Mehrabad airport on March 11 before departing for Baghdad, Rouhani hailed what he called the "special" relations between Iran and Iraq.

"We are very much interested to expand our ties with Iraq, particularly our transport cooperation. We have important projects that will be discussed during this visit," he also said.​

Iraq, which receives financial and military support from Washington, has attempted to balance its relations with the United States and Iran, which carries significant influence with members of Iraq's Shi'ite population.

Tehran does not have an official military presence in Iraq. But the government supports powerful Shi'ite paramilitary groups operating in the country, with estimates of the number of fighters ranging up to 150,000.

The United States has some 5,200 troops stationed in Iraq, mostly focused on training and support missions.

U.S. President Donald Trump last year announced he was pulling out of the 2015 nuclear deal that Iran signed with six world powers and began reimposing sanctions against Tehran that were eased under terms of the accord. The sanctions target Iran's energy, shipbuilding, shipping, and financial sectors.

Iraq was granted limited waivers to continue buying Iranian electricity and the natural gas needed to generate it, although the United States has called on Baghdad to form partnerships with American companies to become energy independent.

Despite the fuel import waivers, Iran's non-oil exports to Iraq fell towards the end of 2018 due to U.S. banking sanctions. Iraq is Iran's second most important trading partner, with $14 billion trade turnover annually before the reimposition of U.S. sanctions.

Iraq also owes Iran more than $2 billion dollars that it says it cannot pay due to U.S. banking sanctions, Iran's central bank chief said in February.

Iranian Foreign Minister Mohammad Javad Zarif, who arrived in the Iraqi capital earlier in the day, thanked Baghdad for having "refused the unjust and illegal sanctions imposed on the Iranian people," in reference to the U.S. sanctions.

"Iran and Iraq are neighbors and no country can interfere in their relations," he also said.

Rouhani, accompanied by a high-ranking political and economic delegation, was received by a guard of honor on landing in Baghdad, where he was welcomed by Iraqi Foreign Minister Mohammed Ali Al-Hakim.

He proceeded for a stop at a Shi’ite shrine in the Iraqi capital and later met with President Barham Salih.

"We have the right conditions for cooperation in all areas, including trade and investment..., energy, electricity and gas, banking ties and cooperation on roads and railways,” Rouhani said after the talks.

"Iraq is an important state in the region and it can play a bigger role in providing security," he told journalists, without elaborating.

Rouhani is expected to also meet with Iraqi Prime Minister Abdel Abdul Mehdi and the country's chief Shi’ite cleric, Grand Ayatollah Ali Sistani in the city of Najaf,

During the visit, a series of agreements will be signed in energy, transport, agriculture, industry and health, Iran’s state news agency IRNA reported.

Rouhani has previously visited Iraq as a private individual but not as his country’s leader.

Iran and Iraq have come a long way since the 1980s, when under dictator Saddam Hussein Iraq waged a bloody eight-year war against Iran, a conflict that left nearly 1 million killed on both sides.

In 2018, Iran's exports to Iraq came to about $9 billion, while an estimated 5 million religious tourists create some $5 billion a year in economic benefits as Iraqi and Iranian citizens visit Shi’ite holy sites in the two countries.

Meanwhile, Rouhani is suffering difficulties at home because of an economic crisis, much of it related to U.S. sanctions. The troubles have led to occasional flareups of street protests in Tehran and elsewhere.

With reporting by AFP, Reuters, and AP