Syria is actively working to strengthen its economic relations and revive trade exchanges with Iraq; however, several complex challenges stand in the way of these efforts. Key issues include Baghdad’s refusal to register new Syrian companies and the lack of formal banking transfers between the two nations, as highlighted by Syrian-Iraqi board member Ibrahim Shalash.
Shalash emphasized that despite fulfilling all requirements for the operation of the Albukamal crossing, the Iraqi government remains hesitant to open the border with Damascus, presenting additional hurdles for Syrian exporters.
Anticipating Iraqi Decisions
He noted, “The Syrian side at Albukamal is prepared to welcome Iraqi vehicles and trucks wishing to enter Syria, having completed all necessary security and administrative measures, including customs and passport protocols.” However, he added, “The Iraqi side has yet to open the border.”
Shalash elaborated that “Syrian exporters continue to face challenges from economic sanctions, particularly the Caesar Act and various U.S. and European penalties. Yet, the principal obstacle to trade with Iraq is the absence of banking cooperation, forcing merchants to rely on the black market, where money is exchanged at a rate of 1,500 Iraqi dinars per dollar, compared to the official Central Bank rate of 1,320 dinars per dollar.”
He further explained, “This discrepancy leads to inflated costs for Syrian products, compounded by high shipping expenses between the two countries, making Syrian goods less competitive compared to their Iranian, Jordanian, Turkish, Emirati, and Chinese counterparts.”
Market Competitiveness of Syrian Industry
According to Shalash, “Syrian industry ranks among the strongest in the region, excelling in sectors such as pharmaceuticals, textiles, and foodstuffs, distinguished by superior quality compared to many competing products.”
He noted, “The Syrian industry has significantly contributed to the resurgence of the Turkish economy, employing between 2 to 3 million Syrians.” He pointed out that “Much of the Turkish apparel reaching Iraq is actually produced in Syrian factories located within Turkey.”
On the topic of Syrian pharmaceuticals, Shalash stated, “Syrians drugs are highly regarded in Iraq due to their therapeutic effectiveness.” He recalled that before the onset of the Syrian crisis in 2011, the Iraqi market relied heavily on Syrian imports, which accounted for approximately 70% to 80% of total goods imported.
Shalash mentioned that “Over 50 Syrian factories are registered in Iraq with local agents. In recent years, 15 to 30 new factories have emerged, yet they require registration with the Iraqi Ministry of Health to facilitate their product exports to Iraq.”
Iraq’s Registration Challenges for Syrian Companies
Shalash revealed that “On January 13, 2025, the Iraqi Ministry of Health enacted a decision preventing Iraqi scientific offices from registering new Syrian companies, despite these factories aiming to enter the Iraqi market.”
He added, “A meeting was held with Iraqi Undersecretary Hani Al-Aqabi to deliberate on the impacts of this decision on the Syrian economy, during which Al-Aqabi requested a month to reassess the situation following improvements in Syria.”
Shalash pointed out that “Al-Aqabi expressed apprehensions regarding sending a committee from the Iraqi Ministry of Health to Syria for security-related reasons, even after assurances were provided about the stability of the situation in Syria, with guarantees for the committee’s safety from the Syrian security authorities, the Syrian Ministry of Health, and the Syrian ambassador in Baghdad.”
He stressed, “Security incidents in Syria are localized, with cities like Damascus, Aleppo, and surrounding areas being completely safe and functioning normally.”
Iraq Is Poised to Resume Trade Exchange
Hassan Al-Sheikh, head of the Iraqi-Syrian Business Council, stated that “The Iraqi side has completed all preparations to resume trade with Syria, provided that the Syrian side establishes a comprehensive outlet at the border to ensure that smuggled goods do not enter.”
Al-Sheikh added, “The Syrian side has met all port requirements, including security, customs, and passport protocols, and is currently awaiting the signing of agreements from Iraqi security leaders to regulate port operations, defining permissible export materials and required documentation like certificates of origin and customs declarations.”
He mentioned, “According to the Iraqi side, the port will be operational this week.”
Regarding the goods to be exchanged, Al-Sheikh explained that “Iraq plans to export dates and various food and industrial goods, while imports from Syria will include confectionery, fruits, vegetables, cosmetics, perfumes, medications, and medical supplies.”
Iraq’s Position on Trade Relations
The Iraqi Ministry of Trade has also responded to the ongoing discussions surrounding trade with Syria.
Muhammad Hanoun, spokesperson for the Iraqi Ministry of Trade, remarked, “Any government cooperation between Syria and Iraq is contingent upon the stabilization of the situation in Syria, allowing the Iraqi-Syrian Committee to resume its meetings and issue a report aligned with Syria’s political climate.”
Hanoun further noted, “Current trade exchanges between the Iraqi and Syrian private sectors are limited to basic commodities like vegetables for the time being.”
It is important to note that the Syrian Ministry of Economy announced plans to bolster the local economy, which includes supporting exports, exploring new markets for Syrian products, increasing trade with friendly nations—Iraq included—and enhancing logistical infrastructure to facilitate export operations.
Basil Abdel-Hanan, Syria’s Minister of Economy in the interim government, revealed on January 6, 2025, that there are governmental efforts aimed at strengthening economic ties with Iraq.
Abdel-Hanan emphasized that “The development of economic relations between the two countries focuses on industrial integration, enhancing trade exchanges, and providing incentives to facilitate the movement of goods and services, in addition to promoting joint investment initiatives and simplifying customs processes.”
