Iraq and Japan’s Economic Diplomacy: The Ebb and Flow of Bilateral Relations Pre and Post-2003

Abstract

This article explores why and how economic diplomacy emerged between Japan and Iraq pre and post-2003. It draws on primary sources, including data from the Observatory of Economic Complexity and Japan’s Trade Statistics, as well as official documents including from the ministries of foreign affairs of Japan and Iraq. The evolution of bilateral relations has been traced through five stages. The formative period from the 1920s to the Second World War; the post-war era until the close of the 1960s; the following decades of the 1970s and 1980s; The 1990s, when Iraq was under UN sanctions; and Iraq-Japan relations post-Saddam. These stages are examined using Maaike Okano-Heijmans’ conceptual framework of economic diplomacy, which includes three dimensions: context (domestic, regional, and international factors), tools (such as aid, trade, or sanctions), and processes (negotiations and communication) that explain the emergence and role of economic diplomacy between Iraq and Japan. Since 1920, Iraq and Japan have retained commercial ties, and economic diplomacy materialised after the Second World War. Since then, bilateral relations have fluctuated, facing different crises, such as the 1973 oil crisis and increased trade throughout the 1970s and 1980s. Iraq’s invasion of Kuwait and the UN sanctions marked the lowest point in bilateral relations. Finally, post-Saddam, economic diplomacy between Iraq and Japan has intensified, including Japan’s aid to Iraq, its expanding diplomatic presence in Iraq and the Kurdistan Region of Iraq, the resumption of trade, and the growth of Japan’s investment in Iraq’s infrastructure. Bilateral challenges linger due to Iraq’s precarious political and security situation, lack of transparency and poor bureaucratic bodies. Additionally, Japan is increasingly diversifying its energy sources and expanding its renewable energy capacity, thereby reducing trade with Iraq.