ISMAG statement on trade prospects for Iraq

25 January 2000 Media statement for immediate release

As reported on RNZ "Morning Report" yesterday, a briefing paper on trade prospects with Iraq was issued today to MPs, officials and media by the humanitarian organisation, Iraq Sanctions Medical Alert Group (ISMAG), a group of Wellington-based health professionals and lawyers.

An ISMAG spokesman, Dr. Marten Hutt, said that "As far as we are aware, this is the first report on trade prospects with Iraq issued since the end of the Gulf War in 1991. It is based on detailed interviews with NZ Dairy Board, Tradenz, Ministry of Foreign Affairs and Trade and other trade officials and business operators with knowledge of this region". Among the main findings are:

• For the first time, it has been revealed that the Dairy Board has been using third-party sales - to such countries as Vietnam, Egypt, and Malaysia - to get product into Iraq and avoid direct sales. This now amounts to 10% of wholemilk powder sales, worth $NZ 70M, and explains huge recent rises in sales to previously small markets, such as a 1000% rise in exports of milkpowder to Vietnam over the last 12 months.

• That there remains untapped potential - between $50-100M according to Dairy Board sources - for developing NZ trade with Iraq, especially wholemilk powder and processed cheese.

• That getting NZ high-quality dairy products into Iraq will help alleviate the humanitarian disaster in Iraq caused by a decade of tough economic sanctions, as well as making sound commercial sense.

• That frustrated traders and humanitarian groups look towards the new Government to consider high-level political support for direct trade with Iraq, co-ordination of trade policy advice, and equipping bureaucrats to explain sanctions processes to traders - all activities not encouraged under previous Foreign Minister Don McKinnon.

• That while NZ has had a "hands-off" policy towards direct trade with Iraq throughout the 1990s (no direct sales since 1991), the Australians, by contrast, have secured 11% of the funds (and the US 6%), running into hundreds of millions of dollars) Iraq is allowed to spend under the "oil-for-food"deal.

Additional Dairy Board and ISMAG quotes - refer: Ray Lilley, "Dairy Board Makes Third-Party Deals to Bust Iraqi Trade Ban", National Business Review (21 January 2000), p. 10; Terry Brosnahan, "Iraq Trade Bonanza Lost", NZ Farmer (20 January 2000), p. 4.

Dr. Marten Hutt , Fax: (04) 463 6568, marten.hutt@vuw.ac.nz

Link to Iraq index for more information on the sanctions and bomb attacks.

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