A TALE OF TWO TRADE SHOWS

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 003818

SIPDIS
SENSITIVE

E.O. 12958: DECL: 12/05/2015
TAGS: ETRD ECON PREL EINV PINR IZ IR
SUBJECT: A TALE OF TWO TRADE SHOWS

Classified By: A/EMIN Michael Dodman, Reasons 1.4 (b,d).


1. (C) SUMMARY: Over back-to-back weeks in November, the
Iraqi Ministry of Trade (MOT) hosted two dramatically
different trade shows. The six-day International
Investment and Reconstruction Workshop (IIRW),aimed at
both entrepreneurs and the average Iraqi consumer,
showcased Iraqi products and an encouragingly wide array of
international goods and services. The IIRW was a precursor
to the resumption of the Baghdad International Fair, an
event much like a State Fair which has not taken place
since 2002. Meanwhile, the first-ever "Iran Expo 2008" was
a more subdued event, featuring only Iranian producers who
were mainly seeking to find Iraqi partners or distributors.
It was sparsely attended but enjoyed the patronage of an
Iranian provincial governor and Baghdad's governor, and
several Iraqi businesses did reportedly ink agreements with
Iranian suppliers. While elements of the Iranian government
use economic ties to strengthen their influence in Iraq,
legitimate Iraq-Iran trade can be good both for Iraqi
consumers and for regional stability. And while their
products lack the appeal and quality of western goods,
Iranian exporters are pro-actively seizing opportunities
here. END SUMMARY.

Baghdad Trade Fair Returns to Life
--------------

2. (U) The Iraqi MOT hosted its IIRW at the Baghdad Fair
Grounds November 10-15. Until 2003, the MOT hosted and
annual Baghdad International Fair -- something like a state
fair without the animals and carnival rides -- that aimed
both to bring commercial suppliers and distributors together
and to raise brand and product awareness among the average
Iraqi consumer. In recent years, poor security and
political issues prevented the MOT from hosting this event.
The IIRW was the MOTs dress rehearsal for the resumption of
the Baghdad International Fair, planned for 1-10 November

2009.
The head of MOTs State Company for Iraqi Fairs (SCIF) was
delighted with this year,s success. One hundred and eighty
businesses from 16 countries filled four full pavilions.
Public attendance was also significantly improved compared to
Similar events held in the city over the past year, thanks to
Security and consumers' interest in the ever-wider array of
new
products available in Iraq. The goods and services on
display
ranged from crafts and traditional Iraqi herbal medicines to
computer networks and Internet providers, high-end vehicles,
and electric generators. Many of these included cutting-edge
products from western household names such as Caterpillar,
Toyota, Nokia, IMB, Hewlett-Packard and Seimens.


3. (U) GOI and other entities that promote economic
activity were also present. Iraq's National Investment
Commission put together an informative booth that featured
its "one-stop shop" concept for foreign and domestic
investors; several international trade ministries or
chambers of commerce (Sweden, Germany, Brazil, Japan and
many from the region) staffed booths; and even the Iraqi
Public Distribution System (PDS),which administers the
largest food ration program in the world, displayed the
eye-catching new packaging in which it delivers milk,
cereals, cooking oil and other consumables to virtually
every Iraqi family. Our random conversations with various
exhibitors suggested that they shared the MOT's enthusiasm
regarding the public turnout and, more generally, the
business opportunities that are emerging in Iraq.

Iran Expo 2008
--------------

4. (C) A week after the successful IIRW, the MOT hosted
"Iran Expo 2008" -- clearly a very different kind of trade
Q"Iran Expo 2008" -- clearly a very different kind of trade
fair. The first event of its kind in Iraq, Iran Expo took
place not at the Fair Grounds but at the Monsour Hotel
November 16-19. Mohammad Javad Mohammadizadeh, governor of
the Iranian Province of Korasan Alrazavih opened the fair.
MOT officials told us that Baghdad Governor Tahan, reportedly
a friend of Mohammadizadeh, lobbied them hard to sponsor the
event. The 44 Iranian exhibitors who participated offered
an interesting mix of goods and services, including
foodstuffs, pharmaceuticals, housewares, and a heavy sampling
of engineering and construction services. Iran Expo was
focused far less on the Iraqi consumer and far more on
bringing Iranian producers together with potential Iraqi
partners or distributors. Indeed, overall attendance was
sparse, but those who did go were typically established
businessmen looking to begin or expand existing import
operations from Iran. PRT employees who visited the fair
noted that the Iranian products were generally not
high-quality
and that only a handful of the products and services were

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truly unique to the Iraqi market (those that were included
high quality Iranian carpets, electrical infrastructure
equipment, and some of the engineering services). However,
Iraqi domestic production of many consumer goods has
plummeted over the past there decades; Iranian producers
are eager to fill the void, and Iran Expo apparently
produced several business partnerships.

Revitalized State Company for Iraqi Fairs
--------------

5. (U) SCIF, relatively inactive since 2003, has developed a
rather ambitious schedule over the next year. Hashem Hatim,
the Director General of SCIF, planned a series of events
culminating in the official re-opening of the Baghdad
International Fair in November 2009. These include similar
events planned in Baghdad and Basra. In February/March SCIF
is hosting what Mr. Hashem calls a "shopping festival month"
at the fairgrounds. This event will be a sort of
international
bazaar, where companies will have designated areas based on
the
country they represent. Iraqi citizens can purchase goods at
cost and duty-free.

Comment
--------------

6. (SBU) The Iran trade show is only one of the recent
indications that Iran is pushing to increase economic ties
with
Iraq. Iranian officials have also recently touted plans for
free-trade zones on the border, increased airline flights
between the countries, and other trade and investment schemes
(although these plans have yet to be initiated or confirmed).

Whether motivated by an interest in increasing Iranian
influence
or diversifying the Iranian economy, the plans also respond
to a
genuine commercial interest in meeting Iraqi demand for
imported
products and services. Legitimate Iraq-Iran trade could have
a
positive impact on regional stability -- although whether
that
proves to be the case or not, Iraqi consumer demand for
Iranian
products will likely remain high until such time as business
conditions improve and Iraqi domestic production can begin to
fill the gap. And while few of the products on offer at Iran
Expo could match the quality or consumer appeal of those
showcased at the IIRW, Iranian firms are obviously seeking
opportunities in Iraq aggressively. End Comment.
CROCKER