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Iraq's parliament on Sunday conducted the first reading of a draft law proposing the cancellation of the 1963 Economic Unity Agreement among Arab League member states. The draft law, presented by the Foreign Relations Committee, to reconsiderÌýIraq's commitments to regional economic integration and reflects the country's current economic priorities and needs.

was established to promote economic cooperation and integration among Arab nations, aiming to create a unified economic space.Ìý

The agreement, signed in Cairo by the Iraqi government alongside other Arab states, including Jordan, Tunisia, Sudan, Saudi Arabia, Syria, the United Arab Republic, Lebanon, Libya, Yemen, Morocco, and Kuwait, was designed to facilitate the free movement of people, goods, capital, and services across borders.Ìý

It also called for the harmonisation of customs regulations, trade policies, and financial systems among the member countries, fostering a collective economic strategy intended to enhance economic development and prosperity in the Arab region. However, more than six decades later, the Iraqi government has proposed the bill and argued that the agreement no longer offers substantial economic benefits to Iraq.Ìý

An Iraqi lawmaker from the Siyada Sunni bloc argued during the parliamentary session that Iraq would not incur any financial burdens from withdrawing from the treaty. According to the lawmaker, the move to cancel the agreement would not result in financial penalties or obligations for Iraq, making the decision a pragmatic one in terms of economic costs.

The proposal to withdraw from the Economic Unity Agreement could indicate a shift in Iraq's foreign economic policy.Ìý

Since the overthrow of Saddam Hussein in 2003, Iraq has been navigating its path in a region characterised by complex geopolitical dynamics and varied economic policies. With the Iraqi economy heavily reliant on oil exports and facing challenges like corruption, unemployment, and infrastructure needs, some lawmakers believe that the country needs to adjust its economic agreements to better support national development and diversification.

The draft law will require further readings and parliamentary debates before it can be approved or rejected.

If passed, Iraq's withdrawal from the agreement would mark a shift away from a cooperative regional economic model toward a more independent and possibly protectionist economic strategy.

If the draft law is approved, it could prompt other Arab League countries to reassess their own commitments under the agreement, potentially leading to broader discussions about the future of economic cooperation within the Arab League.