By Christopher Hinton
U.S. trade representatives met with Iraqi officials Tuesday to rekindle investment and commercial trade as concerns mount that violence and corruption in the Mideast nation are getting worse.
Given Iraq's dangerously high unemployment rate and a ruined infrastructure, the U.S. needs private American investment to come in to help reverse the country's slide toward becoming a failed state.
"This trade mission will connect American and Iraqi companies in a partnership to rebuild the Iraqi economy," said Under Secretary of Commerce Francisco Sanchez, before leaving the United States. "This mission will be economically and commercially beneficial to U.S. and Iraqi firms, and to the citizens of Iraq."
Francisco met with Iraqi Minister of Trade Safa al-Din Muhammad al-Safi to discuss changes to Iraqi policy that could improve the country's commercial climate and promote investment.
U.S. sales to Iraq have been declining over the last two years, and after adjusting for inflation, remain a third of what they were prior to its invasion of Kuwait in 1990, according to the U.S. Commerce Department.
In 2009, the United States exported about $1.77 billion in goods and services to Iraq, down about 14% from 2008. Sales so far this year are trending below year-ago figures.
Imports to the U.S., almost exclusively oil and gas, also have been declining after peaking in 2008 at $22.08 billion.
Joining Sanchez on Tuesday were representatives from 14 U.S. companies, including General Electric Co. (GE), Boeing Co. (BA) and Bell Helicopter, a unit of Textron Inc. (TXT).
The Baghdad government earmarked some $80 billion for infrastructure development for highways, railways, security and defense, according to the U.S. International Trade Administration.
Separately, Honeywell International Inc. (HON) announced Tuesday that it would make a significant investment in Iraq and open offices in Baghdad, as well as in the southern and northern parts of the country.
The company intends to sell automation equipment to Iraq's oil and gas industry.
Violence, corruption and a weak central government may have hindered foreign investment in Iraq, but the Commerce Department reports the Mideast country's gross domestic product also has more than doubled since 2006 to $112 billion last year.
-By Christopher Hinton; 415-439-6400; AskNewswires@dowjones.com