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Iranian, French companies seek deals with Iraq

By Huda Majeed Saleh

BAGHDAD, Nov 6 (Reuters) - Former foe Iran is showing off textiles, electrical goods, agricultural machines and food at an Iraqi trade fair to grab a slice of a lucrative market under Baghdad's U.N. oil-for-food exchange.

Iranian firms attending the annual fair for only the second time since the 1980-88 Iran-Iraq war are among 1,554 companies at an event billed as the largest Iraqi trade exhibition in years.

"All of the 50 Iranian companies represented at the fair deal with goods which Iraq is allowed to import under its U.N. oil programme," said Hussein Meir Dhafar, head of the Iranian pavilion.

"A number of Iranian companies are currently negotiating deals with Iraq to provide it with agricultural machinery, food and medicine," Dhafar said.

"Iran's trade under Iraq's U.N. oil deal in 1999 amounted to $90 million," he added.

The oil-for-food deal allows Baghdad to import humanitarian goods for its people financed by U.N.-monitored crude exports, and subject to approval by a U.N. Iraq sanctions committee.

Iraqi oil exports at current prices earn about $2 billion a month, with 30 percent going to a Gulf War compensation fund and the remainder to humanitarian purchases of aid and food.

Major Iranian exhibitors include Govah Co., which produces spare parts for Mercedes Benz commercial vehicles, Boshkeh Jonob which produces metal barrels, Hafez & Ceramic Inds, Iran Electrical Equipment Engineering Company, the Pharmico Iran Pharmaceutical Industries Export Company, Tractorsazi Commercial and Kara Telephone.

A thaw has been under way between Iran and Iraq in recent months with the two taking a step towards improving relations strained since their 1980-88 war through high-level talks.

Iranian President Mohammad Khatami had talks with Iraqi Vice-President Taha Yassin Ramadan on the sidelines of an OPEC summit in Caracas in September. The two countries last month decided to resurrect a 1975 border and security pact that had been in limbo for 20 years.

One of the biggest delegations is from traditional trade partner France, with oil firms such as TotalFinaElf (TOTF.PA) making up almost a third of the country's participants.

"This year's participation is the fourth and as in every year we introduce new companies to the Iraqi market," said Christian Valery, head of the pavilion.

"Some 70 per cent of the participating firms have already had contracts with Iraq under its oil deal with the United Nations while the remaining 30 per cent are newcomers to the Iraqi markets," Valery said.

Besides oil firms, the French contribution includes Renault (RENA.PA), Peugeot (PEUP.PA), Geodis Overseas (CALB.PA), Entrepose, Group Textron Fluid Handling Products, Coris, Alstom (ALSO.PA), Agencinox and Alcatel (CGEP.PA).

Oil is a key area for French ambitions in the OPEC member state. TotalfinaElf enjoys exclusive negotiating rights for the huge Majnoon and Bin Umar fields and has been close to signing deals for some time.


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