ERBIL, Kurdistan Region – The Kurdistan Regional Government (KRG) introduced dozens of new tariffs, mainly targeting dairy products, and banned cement imports as it brings its customs policy in line with federal standards. The new measures will hit imports from Iran and local producers are hoping they’ll see a boost in business as a result. “We have received [tariffs] for 79 various goods,” Ali Tofiq, head of the Parviz-Khan border crossing between Sulaimani province and Iran, told Rudaw. Further north, at the Haji Omran crossing between Erbil province and Iran, Masoud Bateli, head of the border post, said they have also received 79 new tariffs as “all Kurdistan has one system.” Earlier this year, Erbil and Baghdad reached an agreement to unify their customs policies. The Iraqi government sought to exert federal control over the international borders that lie within Kurdistan Region’s boundaries after the independence referendum of 2017. The deal reached after months of negotiations required Iraq abolish internal customs points that had been extorting tariffs on Kurdish-made and imported goods being transported from the Kurdistan Region to the rest of Iraq and Erbil agreed to follow Baghdad’s instructions at its borders with Iran and Turkey. The purpose of the tariffs is to “preserve local products,” said Samal Abdulrahman, head of KRG customs. “They were issued earlier by Baghdad but we had not implemented them. We have decided to implement them from May 1.” Sulaimani’s dairy producers are hopeful they’ll see increased business with the new charges. There are 34 small and medium factories in the Kurdistan Region producing 2,500 tons of ice cream and other dairy products, according to Hiwa Mohammed, owner of Chyaw company and representative of the Region’s dairy producers. Only 600 tons of what is produced in the Region is sent to local markets. The rest is sold to Iraq, he said. Iran, which has a strong dairy industry, had hoped the sector would survive US sanctions on the country and act as a source of stability for the economy. “We export milk products worth $800 million annually – mostly to neighbouring countries,” Mir Islam Teirmouri, chairman of Iran’s dairy board, told Hindu BusinessLine last year when Washington announced it was withdrawing from the nuclear deal and would re-impose sanctions. Less than a week after the new tariffs came into force, the effects are noticeable. “Iranian products like yogurt are about to be hard to find in the markets. Those available are the stored ones,” Kanaan Adnan, a vendor in Sulaimani, told Rudaw. Ban on cement As of May 1, Baghdad and Erbil have also banned imports of cement, said head of KRG customs Samal Abdulrahman. Kurdistan Region is a major producer of cement. Most of its product gets sent to Iraq, especially the war-torn city of Mosul. The Region’s cement producers had to compete with Iranian imports, which were cheaper. Rebin Kamal owns a cement factory in Sulaimani. He told Rudaw that Iranian cement is a threat to locally made product, "Because it is cheap. It costs them about $16-17 until it reaches our borders… while it costs local manufacturers about $38-40 to produce a ton." Iraq and Kurdistan Region produce more cement than is needed domestically, so “there is no point in importing it,” he added. Producers in Sulaimani province make about 15 million tons annually. “There are five cement factories in Sulaimani which used to produce 40,000 tons a day but due to the [financial] crisis and imports their production dropped by 50 percent,” said Mohammed Jabar, head of industrial development in Sulaimani. “We take cement to Mosul every day,” he said. They also sell to Basra, Baghdad, Najaf, Karbala, Fallujah, Ramadi, and export to Syria. He hopes the ban on cement imports will “improve our business.” Kurdistan and Iraq share several border crossings with Iran along their nearly 1,500-kilometre-long border, with annual trade volume standing at $12 billion. Tehran and Baghdad want to increase that trade to $20 billion, despite pressure from Washington for Iraq to limit its ties with Iran and comply with US sanctions. The KRG’s representative to Tehran recently said that Erbil will find it hard to cut its close business ties with Iran. “We ask that both Iran and America be understanding,” said Nazim Dabagh. “We have to take into consideration our geography.” Additional reporting from Halo Mohammed and Saman Basharati
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