Iraq's president visits Iran weeks after US renews sanctions

Iraq's President Barham Salih began a visit to Iran on Saturday, where he pledged to improve relations less than two weeks after the US restored oil sanctions that had been lifted under the 2015 nuclear deal.

Iran, which has had major influence over Iraq since the 2003 US-led invasion that toppled Saddam Hussein, is hoping to maintain exports to its neighbour despite the renewed sanctions.

Iraq is Iran's second-largest market after China, buying everything from food and machinery to electricity and natural gas.

At a joint briefing after their meeting, Iran's President Hassan Rouhani said they 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.

Trade between the two countries was some USD 7 billion in 2017, and they have vowed to boost it to USD 8.5 billion this year. Rouhani said it could eventually reach USD 20 billion a year.

Salih also pledged to improve ties, and 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.

President Donald Trump pulled the US out of the 2015 nuclear deal between Iran and world powers in May. United Nations monitors say Iran still abides by the deal, in which it agreed to limit its uranium enrichment in return for the lifting of international sanctions.

Since then, Trump 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.

The full brunt of the measures came into effect November 5 when the US re-imposed oil and banking sanctions.

The US, which provided crucial military support to Iraq in its battle against the Islamic State group, has granted Iraq a 45-day waiver to allow it to continue to purchase gas and electricity from Iran.

Salih said Iraq should not be "a field for struggle between conflicting demands and wills".