President Recep Tayyip Erdoğan and Iraqi Prime Minister Mohammed S. Al Sudani on Monday oversaw the signing of a preliminary agreement between Türkiye, Iraq, Qatar and the United Arab Emirates (UAE) to cooperate on the Development Road project.
The deal on the landmark road and rail project that is expected to consolidate economic ties between the two neighbors came on the sidelines of Erdoğan's long-awaited visit to Baghdad, the first by a Turkish leader since 2011.
Accompanied by a large delegation, Erdoğan held talks with Iraqi President Abdel Latif Rashid and Al Sudani. Cooperation on big economic projects was also on the table.
Erdoğan and Al Sudani witnessed the signing of the four-way memorandum of understanding (MoU) for joint cooperation on the Development Road project, with Qatari and Emirati ministers in attendance, a statement from the prime minister's office said.
Iraq launched the $17 billion project last year to link a major commodities port on its southern coast by rail and road to the border with Türkiye.
The 1,200-kilometer (745-mile) road and rail project aims to turn Iraq into a transit hub, connecting Asia and Europe with a link between the country's Grand Faw Port in the oil-rich south and Türkiye in the north.
Iraqi and Turkish officials signed 24 memorandums of understanding during Erdoğan's one-day visit.
Addressing a joint news conference with Al Sudani, Erdoğan said the agreements were part of a solid road map for cooperation, highlighting the importance of the Development Road deal.
Bilateral trade was worth $19.9 billion in 2023, down from $24.2 billion in 2022, according to official Turkish data. In the first three months of 2024, Turkish exports to Iraq rose 24.5%, while imports fell 46.2%.
Security cooperation
The trip comes as regional tensions spiral, fueled by the Israeli offensive on Gaza and attacks between Israel and Iran.
Iraq is Türkiye's key trade ally in the region. However, relations have been strained over what Ankara sees as Baghdad's insufficient cooperation in its fight against the PKK terrorist group, as well as a row over oil exports.
Türkiye often launches strikes against targets in the region, which Baghdad has said is a breach of its sovereignty. Ankara says it must protect itself against the PKK, which Türkiye and its Western allies designate as a terrorist group.
Counterterrorism dominated Erdoğan's talks in Iraq, and the president said they discussed joint steps to be taken on the matter.
Erdoğan told Rashid that Türkiye "had expectations from Iraq in the battle with the PKK terrorist organization, that Iraq must eradicate all sorts of terror."
He stated they decided to set up joint permanent committees for cooperation in many fields, from counterterrorism, economy, health, and transportation to education.
Erdoğan said Türkiye appreciated Iraq's move to declare PKK a banned organization and was ready to endorse any steps Baghdad would take to declare it as a terrorist group.
"We will move forward in (the fight) against the PKK together," he said. "The PKK's presence in Iraq will end soon," he added. Erdoğan noted that Türkiye cannot allow attacks from Iraqi soil to another country.
Oil exports
After meetings in Baghdad, Erdoğan was set to travel to Irbil, the capital of the Kurdistan Regional Government (KRG), a semi-autonomous entity controlling Iraq's north.
The visit was also expected to weigh on the dispute over oil exports from the KRG, which has been a particular sticking point.
The Iraq-Türkiye oil pipeline, which once handled about 0.5% of global oil supply, has been offline since March 2023, when Ankara halted flows following an arbitration ruling by the International Chamber of Commerce (ICC).
The ICC said Ankara should pay Baghdad damages of $1.5 billion over what it said were unauthorized exports by KRG between 2014 and 2018. Türkiye, on the other hand, said the ICC had recognized most of Ankara's demands. Its Energy and Natural Resources Ministry said the chamber ordered Iraq to compensate Türkiye for several violations concerning the case.
About 450,000 barrels per day of crude once flowed through Iraq's northern route via Türkiye, and its closure has led to the loss of more than $14 billion for Iraq, the Association of the Petroleum Industry of Kurdistan (APIKUR), which represents international oil companies active in the region, estimates.
KRG exports flow through a pipeline to Fish-Khabur on the northern Iraqi border, where the oil enters Türkiye and is pumped to the port of Ceyhan on the Mediterranean coast.
Talks on resuming exports have stalled. Last month, Iraq's Oil Ministry said foreign oil firms operating in KRG are partly to blame for the delay in resuming crude exports after failing to submit contracts for revision.