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Iran, Iraq Vow To Significantly Boost Trade Despite U.S. Sanctions

Iraqi President Barham Salih (file photo)

Iran and Iraq have vowed to significantly boost trade despite the United States imposing new crippling economic sanctions against Tehran.

Under the sanctions regime, countries that do business with Iran without U.S. waivers risk hefty fines, a threat that has forced many trade partners to cut ties with the Islamic republic.

But Iranian President Hassan Rohani said annual bilateral trade with Iraq could rise to $20 billion from the current $12 billion.

He made the remarks after a meeting with Iraqi President Barham Salih in Tehran on November 17, some two weeks after Washington imposed new sanctions against Iran's oil, banking, and transportation sectors.

Iran has wielded considerable influence in Iraq since the 2003 U.S.-led invasion that toppled Saddam Hussein.

Tehran is hoping to maintain exports to its neighbor despite the renewed sanctions. Iraq is Iran's second-largest market after China, buying everything from food and machinery to electricity and natural gas.

"Through bilateral efforts, we can raise this figure [for bilateral trade] to $20 billion in the near future," Rohani said in comments broadcast live on state television.

Rohani said he and Salih had discussed increasing trade in electricity and oil products and the establishment of free-trade zones along the border.

He said they also discussed joint oil projects and improving transport links between the two countries.

Salih suggested the formation of a "new regional system" including Iraq and Iran, one based on "political integrity, national interests, and cooperation between nations and governments." He did not elaborate.

Baghdad is seeking U.S. waivers that would allow it to import Iranian gas.

Salih later met Iranian Supreme Leader Ayatollah Ali Khamenei, who said "some governments in the region and outside... interfere in Iraq's internal affairs and they must be strongly resisted."

Iran has accused the United States and its regional rival Saudi Arabia of working to undermine its economic and geopolitical interests in the region.

President Donald Trump pulled the United States out of the 2015 nuclear deal between Iran and world powers in May.

Since then, Trump has announced what he billed as the "toughest ever" sanctions against Iran, and the country has seen its oil exports plunge and its currency lose more than half its value.

With reporting by AP and Reuters