Iranian President Rouhani begins official visit to Iraq, hopes for better trade ties

Shi'ite Iran is determined to strengthen its brotherly ties with neighbouring Iraq, Iranian President Hassan Rouhani said on Monday before his "historic" first visit to the country, state television said on Monday.

The visit is a strong message to the United States and its regional allies that Iran still dominates Baghdad, a key arena for rising tension between Washington and Tehran.

"We are very much interested to expand our ties with Iraq, particularly our transport cooperation," Rouhani said at Tehran's Mehrabad airport. "We have important projects that will be discussed during this visit."

During the three-day visit, a series of agreements will be signed in fields such as energy, transport, agriculture, industry and health Iran's state news agency IRNA said.

"Iraq is another channel for Iran to bypass America's unjust sanctions imposed on Iran. This trip will provide opportunities for Iran's economy," a senior Iranian official, who is accompanying Rouhani, told Reuters.

The parlous state of Iran's economy since U.S. President Donald Trump's decision last May to pull out of a 2015 nuclear deal between Iran and six major powers has pushed the country's leaders to try to expand trade ties with neighbours.

The agreement lifted in 2016 sanctions that had been imposed by the United States, European Union and United Nations in return for Iran's curbs on its sensitive nuclear programme.

The Trump administration, which said the accord was too generous and failed to rein in Iran's ballistic missile programme and its involvement in regional conflicts such as Syria and Yemen, reimposed sanctions on Tehran.

Other signatories to the deal have been trying to salvage the pact after the U.S. exit, but U.S. sanctions have largely scared off European companies from doing business with Iran.

The Europeans have promised to help firms do business with Iran as long as it abides by the deal. Iran has itself threatened to pull out of the 2015 deal unless EU powers demonstrably protect its economic benefits.