|Lebanese do well at Iraq fair - The Daily Star
|Lebanese do well at Iraq fair - Free-trade deal yields promising results.
Beirut summit proved a big winner for firms desperate to revive trade with Baghdad.
The Daily Star
Baghdad: Rony Haikal was stunned on Sunday after Iraqi Trade Minister Mohammed Mehdi Saleh asked the sales manager of the Lebanese-based hi-tech company whether he would like to ink a $4 million contract.
Haikal did not clinch the deal on pure luck. The vice-chairman of the Iraqi Revolutionary Command Council, Izzat Ibrahim, had just paid a visit to Haikal's Jubaili Bros. stand in the Lebanese wing of Baghdad's International Fair.
Jubaili Bros. is only one of some 56 Lebanese exhibitors taking part in the 35th international Iraqi fair, where 49 countries are competing for the rich and consumer-hungry Iraqi market. Minister of State Beshara Merhej and a high-ranking delegation of industrialists inaugurated the Lebanese wing Friday with ceremonial pomp.
But Ibrahim's visit has just added more impetus to Lebanese industrialists who are vying for Iraqi contracts.
The Saudi-Iraqi rapprochement during the Arab League summit held in Beirut earlier in the year also allowed Lebanese officials to get the official Gulf nod needed to sign a free-trade agreement days later.
"Lebanon may be small economically," Ibrahim said, "but it scored big during (March's) Arab summit."
Lebanon's signing of a long-awaited trade agreement with Baghdad, Lebanon's former No. 1 trade partner, in April this year provided Beirut with an extra push. The agreements skirt tough UN rules under the 1996 oil-for-food program, which allows Iraq to purchase goods in exchange for oil sales determined by the world body.
But such progress does not spell an end to Haikal's troubles.
"I have five contracts worth some $2 million that were frozen by the United Nations," he said.
"By the time I got the approval, the Iraqi authorities did not have enough allocations for them," he added.
Haikal cannot resort to the agreement although it offers zero tariffs for goods traded with the private sector.
"We as manufacturers of electrical goods have not benefited much from the free-trade agreement," Haikal said. "Our contracts are mainly with the public sector, through the oil-for-food program. We can't make use of the free-trade agreement because the government buys our equipment and it later sells at nearly half price to the private sector."
Haikal said his heart was set on a protocol with Iraq that exchanged oil for goods, similar to pacts Baghdad has secured with Jordan and Syria. But so far, Iraqi officials have remained quiet on the issue.
"I do not have details about the negotiations over the oil protocol," Iraqi Deputy Prime Minister Tareq Aziz told the Lebanese delegates Friday.
Even Iraqi Vice-President Taha Yassin Ramadan, the man who inked the understanding in April, would not comment on an oil agreement that could possibly rid Lebanon of its energy bills for good.
"I think the Lebanese and Iraqi governments aspire for better bilateral ties," he said.
Playing the political game is tough work for Lebanese industrialists, who need greater government involvement to secure better contracts.
"I am an industrialist and not a politician," said Fadi Abboud, president of the Lebanese Industrialists Association.
"The contracts through the UN need political weight. That's why I am focusing on getting as much as possible from the free trade agreement, which deals directly with the Iraqi private sector," Abboud said.
"We are conducting talks with Iraqi officials to import oil and gas, with Syrian coordination," Merhej said after his meeting with Aziz.
But he cited technical difficulties for delaying talks on the signing of an oil protocol.
"We can't move ahead with the protocol due to political reasons, and I think the Iraqis understand our situation," Abboud said.
The political situation inside Iraq or Lebanon may be outside the industrialists' control, but it is not deterring them from forging ahead in a quest to secure more deals.
"Coming here may be a risk, but all trade is based on risk," said Haikal.
"All in all, Lebanon's contracts with Iraq have reached $500 million," Abboud added. "Only $200 million are industrial goods made in Lebanon."
According to Saad, Lebanon's trade with Iraq has amounted to $1.250 billion since 1997.
"I had participated in this fair in 2000, but came again this year because the free-trade agreement phased out the 200 percent tariffs we had to pay before," said George Nasraoui, general manager of Sonaco, a producer of agricultural and industrial goods.
Despite the stiff competition and the threat of war, industrialists say they cannot afford to abandon the Iraqi market.
The Daily Star