- The Washington Times - Friday, December 5, 2003

ROME (AP) — Governments from 16 countries, including the United States, Japan and some European nations, agreed yesterday to insure payment of up to $2.4 billion worth of exports to Iraq as part of efforts to rebuild the country and jump-start its economy, officials said.

The agreement, signed in Rome by Iraq’s U.S.-led Coalition Provisional Authority, export credit agencies from the 16 participating countries and the Trade Bank of Iraq, is aimed at short-term exports of goods and services to the country.

“These new and very welcome guarantees are an encouragement to firms around the world who want to do business here, that can help Iraq build and grow,” Trade Bank of Iraq President Hussein Al-Uzri said in a press release issued by the provisional authority.

In July, a consortium of about a dozen private banks led by J.P. Morgan was awarded a contract to provide letters of credit to companies looking to do business in Iraq via the newly formed Trade Bank of Iraq, which for now is being run by the private banks themselves.

Yesterday, government export credit agencies such as the U.S. Export-Import Bank, the U.S. Overseas Private Investment Corp., Italy’s SACE and Australia’s EFIC committed the more than $2 billion to insure the loans.

In the statement, the Trade Bank of Iraq said it was issuing its first seven letters of credit to back the purchase of $7.9 million in medical supplies, vaccination syringes and sutures.

Mr. Al-Uzri said those letters of credit “will help Iraq buy vital supplies, as well as the capital goods needed for reconstruction and development.”

Iraq’s interim trade minister, Ali Abdul-Amir Allawi, said during the ceremony that the deal would do for Iraq what the Marshall Plan did for Europe after World War II.

Also in attendance was Marek Belka, a former Polish finance minister who is the director of economic development for the provisional authority. “Iraq’s trading relations with the rest of the world continue to normalize,” he said.

Countries participating in the deal were: Australia, Austria, Belgium, Britain, Czech Republic, Denmark, Germany, Italy, Japan, Luxembourg, Netherlands, Poland, Spain, Sweden, Switzerland and the United States.

France, which was vehemently opposed to war in Iraq, did not participate, although the French bank Credit Lyonnais is one of the private banks involved in the Trade Bank of Iraq.

The United States and Japan are the largest contributors, offering insurance of $500 million each, an official at Italian export credit agency SACE said.

SACE, for its part, agreed to insure payment of about $301 million, the Italian Economy Ministry said.

The agreement is unrelated to the October donor conference in Madrid, which won pledges of $33 billion for reconstruction. The Madrid figure did not include export credits, technical assistance or other non-cash aid.

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