Executive Summary
Following a 16-year hiatus, Iraq’s WTO Accession Working Party reconvened on 18 July 2024, signaling a new chapter in the nation’s protracted journey toward full membership. This renewed push comes against a backdrop of sustained government efforts to modernize the economy, rebuild trade-related infrastructure, and harmonize domestic legislation with international best practices.
- WTO Accession as a Catalyst: Accession can act as a cornerstone of Iraq’s broader policy agenda, enhancing accountability, transparency, and predictability in the business environment.
- Key Policy Challenges: Iraq must finalize an array of legislative reforms—covering tariffs, customs valuation, technical standards, sanitary and phytosanitary (SPS) measures, and trade in services. These reforms must be aligned with WTO agreements and supported by robust domestic institutions capable of enforcing them.
- Recent Milestones: Under the stewardship of Ambassador Saqr Almoqbel of Saudi Arabia, the third Working Party meeting saw Iraq’s delegation, led by Minister of Trade Atheer Dawood Salman Al Ghrairi, submit initial market-access offers on goods and services, present a revised Memorandum of the Foreign Trade Regime (MFTR), and highlight recent progress in updating key legislation.
- Outlook and Next Steps: WTO members have called on Iraq to intensify bilateral negotiations, refine its legislative action plan, and deepen capacity-building efforts. A Round Table for technical assistance is in the pipeline to accelerate these reforms, with the fourth Working Party meeting tentatively slated for early 2025.
By leveraging WTO membership as an external anchor, Iraq can strengthen its nascent diversification strategy, reduce reliance on oil rents, and expand its footprint in global value chains. Nevertheless, successful accession hinges on addressing lingering institutional bottlenecks, ensuring equitable distribution of the gains from trade, and building consensus among domestic stakeholders.
- Introduction
Iraq’s economic narrative—marked by conflict, sanctions, and heavy reliance on oil—has long underscored the need for robust structural reforms. Since the early 2000s, a series of governmental measures have sought to pivot the country’s economy toward market-based principles, attract foreign investment, and foster integration with regional and global trading partners.
Despite these initiatives, significant hurdles remain:
- Legacy of Centralized Control: Decades of state-led economic management have weakened private-sector development and constrained innovation.
- Security and Regional Instability: Persistent security challenges exacerbate supply-chain disruptions, raise transaction costs, and deter capital inflows.
- Fragmented Trade Regime: Numerous bilateral agreements coexist alongside incomplete or outdated legislation, leading to confusion and uneven enforcement of trade policies.
Against this backdrop, the recent resumption of WTO accession talks constitutes a critical opportunity. By aligning domestic regulations with WTO rules, Iraq can reduce opacity, open new markets for non-oil exports, and foster a more predictable business environment conducive to private-sector growth.
2. Revisiting Iraq’s WTO Accession: Renewed Momentum in 2024–2025
2.1 Historic Third Meeting of the Working Party
On 18 July 2024, WTO members reconvened in Geneva to discuss Iraq’s accession for the first time since 2008. Ambassador Almoqbel, Chair of the Working Party, lauded the Iraqi government’s recent strides toward legislative conformity. Minister Al Ghrairi reaffirmed that “the Government of Iraq remains steadfast in its commitment to pursue a reform agenda … in terms of enhancing trade policies, boosting the business environment, and creating favorable conditions for foreign investment.”
In particular, the initial market-access offers on goods and services represent a pivotal step in the negotiating process, providing WTO members with a clearer picture of Iraq’s intended commitments. While the offers remain preliminary, they give tangible form to Iraq’s pledge to reduce tariff rates, ease quantitative restrictions, and improve the regulatory regime for service providers.
2.2 Legislative Action Plan and National Coordination
Iraq’s National Committee on Accession has led inter-ministerial coordination efforts, harmonizing economic legislation with WTO rules. In recent months, the Committee has produced or updated:
- Customs Valuation Legislation aligned with the WTO Agreement on Customs Valuation, prioritizing transaction value and reducing arbitrary methods of appraisal.
- Draft Laws on Technical Standards and SPS Measures to ensure compliance with the TBT and SPS Agreements, facilitating both imports of safe products and enhanced market access abroad.
- Regulations on Foreign Investment and Services to buttress a more liberal and competitive landscape in key sectors, including finance, telecommunications, and transport.
These legislative developments, detailed in the revised Memorandum of the Foreign Trade Regime (MFTR), have been subject to formal and informal consultations with WTO members.
3. Path Dependencies: Balancing Past Legacies with Future Reforms
3.1 Duality in Tariffs and Price Controls
Despite formal liberalization in some areas, remnants of Iraq’s past economic regime persist. Certain essential commodities, especially in the agricultural and energy sectors, remain subject to price controls or export restrictions, leading to policy inconsistencies at the border. These distortions can create incentives for smuggling and undercut the effectiveness of uniform tariff schedules.
3.2 Overlapping Regional Agreements
Iraq has previously entered various Free Trade Agreements (FTAs) within the Arab region, some of which grant preferential access to partner countries. Similarly, potential future FTAs—such as with the European Union or the United States—could further complicate customs and rules-of-origin procedures if not carefully harmonized with Iraq’s eventual WTO tariff bindings.
- Policy Recommendation: Adopting a low, uniform MFN tariff or a temporary reconstruction surcharge could reduce administrative burdens, mitigate corruption risks, and simplify ongoing FTA negotiations.
3.3 Security Factors and Trade Logistics
Security remains a binding constraint on trade, especially given transport-related disruptions and governance gaps along some borders. Customs authorities, saddled with outdated systems and still-developing risk management frameworks, face practical difficulties in enforcing WTO-aligned protocols. Enhanced institutional capacity, coupled with infrastructure investments, is crucial to sustaining the reforms required under WTO agreements.
4. Strengthening Institutional Architecture: Customs, Standards, and Beyond
4.1 Modernizing Customs Administration
Implementing the WTO Customs Valuation Agreement necessitates more than legislative alignment; it requires robust training, IT infrastructure, and auditing to curb undervaluation or misclassification of imports. Iraq’s customs service must shift from a gatekeeper role to a risk-based facilitator model that streamlines border procedures while ensuring revenue collection and compliance with health and safety regulations.
4.2 Technical Standards and SPS Compliance
Iraqi policymakers have recognized the importance of maintaining high-quality, internationally recognized standards. This approach involves:
- Aligning Domestic Standards with the Codex Alimentarius (for food safety) and ISO norms (for industrial goods and environmental management).
- Upgrading Testing and Certification through public-private partnerships to ensure that local producers have access to accredited laboratories and certification bodies.
- Institutional Reorganization of the State Standardization and Metrology Agency, separating accreditation and regulatory oversight to limit conflicts of interest.
4.3 Services Liberalization via GATS Disciplines
A crucial driver of non-oil growth is an efficient service sector. As Iraq modernizes banking, telecommunications, and professional services, WTO-based liberalization can accelerate foreign direct investment (FDI) and encourage technology transfer. By proactively incorporating General Agreement on Trade in Services (GATS) principles—especially for “backbone” services (logistics, finance, ICT)—Iraq can lower transaction costs, increase domestic firms’ competitiveness, and diversify its exports.
5. Trade Remedies: Balancing Safeguards and Antidumping
5.1 Avoiding the Pitfalls of Antidumping
While antidumping rules are central to WTO disciplines, they can be prone to misuse if domestic institutional capacity is weak. Protecting uncompetitive sectors via broad antidumping measures risks perpetuating inefficiencies and enabling rent-seeking behavior.
5.2 Temporary Safeguards as a More Balanced Mechanism
If local industries face serious injury from surges in imports, WTO safeguards (Article XIX, GATT) are generally more transparent and temporary, obliging states to gradually re-liberalize after the adjustment period. This mechanism aligns better with Iraq’s objective of establishing a stable, investor-friendly environment.
6. Infrastructure Bottlenecks: Aviation, Ports, and Beyond
6.1 Aviation Services Outside the GATS
Although air transport remains largely exempt from GATS, it is integral to the growth of trade and tourism. With key global players now investing in Iraqi airports, policymakers can harness “open skies” agreements to attract international carriers and further reduce freight costs—a vital concern for exporters of time-sensitive agricultural or specialty products.
6.2 Seaports and Airports as “Landlord” Models
Transitioning to a landlord-port model—where the state regulates and leases port infrastructure while private companies operate terminals—can significantly improve efficiency. This structure has been successfully employed in Gulf ports (e.g., Jebel Ali in Dubai) and encourages competition, accelerates capital improvements, and lowers logistics costs.
7. Institutional Lock-Ins and Fast-Track Authority
7.1 Locking in Reforms
Given Iraq’s historical volatility, constitutional or statutory “lock-ins” are worth consideration. For instance, a super-majority requirement in Parliament to raise uniform tariffs can deter protectionist coalitions, while a simple majority suffices to lower rates. This mechanism would help consolidate liberalization and reassure foreign investors wary of sudden policy reversals.
7.2 Coordination and Fast-Track Legislation
A dedicated Office of WTO Accession—armed with fast-track authority—could centralize the legislative drafting process, liaise with stakeholders, and streamline inter-ministerial decision-making. Drawing on the experience of transitioning economies in Central and Eastern Europe, quick enactment of a bundle of harmonized laws often proves more efficient than piecemeal reforms.
8. Outlook: Charting the Path to 2025 and Beyond
8.1 Bilateral Talks and Market Access
In the months following the July 2024 meeting, Iraq will intensify bilateral discussions with key trading partners to refine schedules for tariff reductions and clarify services commitments. The next round of market-access offers will likely reflect a more precise picture of Iraq’s capacity to open strategic sectors without jeopardizing sensitive domestic industries.
8.2 Technical Assistance and Capacity Building
Acknowledging Iraq’s status as a post-conflict economy, multiple WTO members and international agencies have pledged support for capacity-building measures—ranging from customs modernization to legislative drafting. An upcoming Round Table will delve into the specific technical assistance needs, aiming to expedite Iraq’s path toward full membership by minimizing administrative bottlenecks.
8.3 Fourth Working Party Meeting
If Iraq finalizes legislative updates and bilateral negotiations progress smoothly, the fourth Working Party session may convene in early 2025. Iraqi negotiators are keen to maintain the momentum, aware that lengthy delays risk undermining political will at home and diluting the confidence of trading partners abroad.
Take Away
Iraq’s revived WTO accession process marks a significant milestone, not only for the nation’s economic evolution but also for the broader Middle East region. By demonstrating a commitment to rules-based trade, transparent governance, and the international standards of the WTO, Iraq can better position itself to capitalize on global value chains, attract diversified foreign investment, and foster inclusive growth.
However, success in this endeavor hinges on consistent political support, skillful legislative drafting, and the creation of agile institutions capable of carrying out reforms in a challenging security environment. The steps taken thus far—especially regarding the revised MFTR and initial market access offers—are promising. The continued spotlight on technical assistance, strong coordination with WTO members, and firm lock-in measures to safeguard reforms will be crucial to ensuring that Iraq’s WTO accession becomes a lever for lasting economic resilience and national prosperity.
Disclaimer
This document is provided for informational purposes and does not constitute legal advice. The views expressed herein are those of the author and do not necessarily represent the official position of any government agency or international institution. For further information, please contact Salt & Associates Law Firm, Baghdad, Iraq.
