Trading With the Enemy

BAGHDAD. Considering the events of the past several months, investing in Iraq wouldn’t sound like the safest bet. But the threat of war didn’t prevent an impressive turnout at the annual Baghdad International Trade Fair that wrapped up on Sunday. Representatives of nearly 1,200 businesses from 49 countries came to display their products in the strongest showing at the fair since the onset of the 1991 Gulf War.

There were no American companies present and only one from Washington’s junior partner Britain. Significantly, Iraq’s former adversaries Saudi Arabia and Iran both had large pavilions. Western Europe was also well represented. France, Iraq’s largest western trade partner, had 81 companies housed at its massive pavilion.

“The importance of this fair is that it is a clear message that despite the risk of bombing, all these companies and all these countries still believe in peace,” said Jihad Feghali, the managing Director of France’s Nutris Company.

Feghali was one of the most political businessmen at the fair. In 2000 he organized the first humanitarian flight from Paris to Baghdad in protest of the sanctions. He knows well how difficult it is to do business with Iraq. His company sells industrial equipment and biomedical systems. He deals in goods that have been consistently banned by Washington. Feghali says that the US dominated sanctions committee at the UN that reviews contracts between Iraq and international companies is constantly delaying and holding up his contracts for review of dual-usage i.e. military value.

“You can take anything for dual-usage,” Feghali told . “Baby milk can be dual-usage, anything can be dual-usage.” He points to a contract his company has for developing a milk bottling line, saying the sanctions committee has held up the contract for more than 2 years.

“A more civil contract you cannot have,” he says. “[The committee] asked lots of questions about the pumps, the pipes, lots of things like that. I don’t know how you can bottle milk without pumps. Maybe these pumps can launch scud [missiles] over other countries; I’m not military, so I don’t know. We tried to give explanations but we lose time and we lose money and we lose effort and its not the right way of helping people to save the world economy.”

Feghali also said that the sanctions create logistical nightmares for contracts, even after they are approved. Nutris has been selling Iraq cancer medications with isotopes that have a shelf life of 3-4 days. “It is very tough for us to supply the hospitals with these products without using the airport and no airplanes go into Saddam Airport from Europe, so we have to bring the medicines to Jordan and then by truck overnight to Iraq. The products reach Baghdad after 2 or 3 days_sometimes quite at the end of their shelf-life.”

These stories were repeated at booth after booth at the fair. Because of the sanctions, Iraq is not permitted to buy anything directly. Its oil revenues_generated under the so-called oil-for food program– are put into an escrow bank account abroad and Baghdad must then apply for permission to use the funds to purchase goods or services on the world market. Over the last decade, Washington and Britain have consistently blocked such items as pencils, chlorine and ambulances.

“Something like an incubator would take one year for getting the approval,” said Daniel Le Borgne, CEO of the French company Cercomex, which also deals in medical equipment.

Le Borgne began doing business in Iraq more than 20 years ago. He says his primary reason for trading with Iraq remains profit. But since the imposition of sanctions in 1990, everything has gotten much more difficult. In fact, Le Borgne said he had to get permission from the US dominated sanctions committee to showcase the display model of his latest incubator. He said the incubator needed to be checked for possible military usage.

With war quite possibly on the horizon, many of the medical vendors at the fair told that Baghdad is increasing its purchases of medical supplies and emergency equipment. But the sanctions are hindering the preparations for responding to future destruction in the country. Outside France’s pavilion at the fair, the French auto-giant Peugeot had new ambulances on display. But company spokespeople said the sanctions committee has put significant limitations on the number Baghdad can import.

“Its something very, very important, very needful for the health organizations in Iraq,” said Peugeot representative Jamal Salm. “But there are less than 1,000 ambulances in Iraq, 600 of them Peugeots. The World Health Organization evaluated the need for a territory like Iraq at 3,500 ambulances.”

Several businesses expressed fears of a massive attack on Iraq in the next several months. “It’s is frightening a lot of ship owners,” said Henry Delannoy, a Senior Vice President at the shipping giant CMA CGM, the world’s 6th largest marine shipping company.

His massive freightliners bring goods through the Arabian Gulf into southern Iraq, a definite frontline in any US attack on the country. “Nobody knows what will happen to our ships; nobody knows what will happen to our containers, so it is a risky area and this is why the competition is much less than other areas.”

Delannoy says that unlike other shippers, he is not worried about his freightliners in the event of a full-scale war. In fact his company’s ships played a role during the Gulf War. “We lost no ships. On the contrary, we put our ships at the disposal of US forces at the time.”

While there were several businesses that said trading with Iraq was a political statement, most said their motivation was profit, saying they would do business in Iraq regardless of who is president. The Iraqi government hailed the massive turnout at this year’s trade festival as a great success. For them it represents the culmination of years of work repairing relations with most countries in the world. Iraq has signed free trade agreements with several countries in the region and has resumed trade with Saudi Arabia.

But both Baghdad and its growing list of trade partners know that their future in Iraq depends on decisions being made in Washington. And for now, that future is very uncertain.

JEREMY SCAHILL is an independent journalist, who reports for the nationally syndicated Radio and TV show Democracy Now! He is currently based in Baghdad, Iraq, where he and filmmaker Jacquie Soohen are coordinating www.iraqjournal.org, the only website providing regular independent reporting from the ground in Baghdad.


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JEREMY SCAHILL, an independent journalist who reports frequently for the national radio and TV program Democracy Now, has spent extensive time reporting from Iraq and Yugoslavia. He is currently a Puffin Writing Fellow at The Nation Institute. Scahill is the author of Blackwater: The Rise of the World’s Most Powerful Mercenary Army.His new website is RebelReports.com

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