Are Egypt, Jordan and Iraq forming an alliance?

Egypt Iraq and Jordan summit

Egypt, Jordan and Iraq agreed to bolster security and economic cooperation at a tripartite summit Sunday that saw an Egyptian head of state visit Iraq for the first time in three decades.

Sisi and Abdullah met Iraqi President Barham Saleh and Prime Minister Mustafa al-Kadhemi, with Saleh saying the encounter was “an eloquent message amid enormous regional challenges”.

“Iraq’s recovery paves the way to an integrated system for our region built on the fight against extremism, respect for sovereignty and economic partnership,” Saleh said on Twitter.

The summit held between Kadhemi and his guests broached regional issues, as well as ways of bolstering cooperation between Iraq, Jordan and Egypt in the fields of security, energy and trade, according to a joint statement released at the end of the meeting.

The leaders discussed a “political solution” to Syria’s 10-year civil war based on UN resolutions “that would preserve its security and stability and provide adequate conditions for the return of refugees”.

The leaders also welcomed efforts underway to restore stability in Libya and Yemen, and called for the departure of foreign forces and mercenaries from Libya.

Kadhemi had set the tone at the start of the summit, saying the three countries would “try to shape a common vision… through cooperation and coordination” regarding Syria, Libya, Yemen and Palestine.

Sisi is the first Egyptian president to visit Baghdad since Iraqi dictator Saddam Hussein’s troops invaded Kuwait in 1990.

Relations between Baghdad and Cairo have improved in recent years, and officials from the two countries have conducted visits.

The Jordanian king visited in early 2019 for the first time in 10 years.

In a statement, US State Department spokesman Ned Price said Washington welcomed the “historic” visit, and called it “an important step in strengthening regional economic and security ties between Egypt, Iraq, and Jordan and to advance regional stability”.

Egypt’s relations with Jordan and Iraq

Iraq’s close economic ties to Egypt and Jordan date to the 1980s, during the Iran-Iraq War. Jordan became Iraq’s economic lifeline at that time, serving as a conduit for imports and oil exports through the port of Aqaba. Jordan also received most of its own oil, highly subsidized, from Iraq. King Hussein was Iraqi dictator Saddam Hussein’s closest ally at the time, visiting Baghdad often during the war. Egypt, meanwhile, saw more than one million of its citizens relocate to Iraq during the 1980s to fill jobs made vacant by the mass conscription of Iraqi men into the armed forces — so many that Iraq constituted Egypt’s largest source of remittances.

Soon after the end of the war, the three countries, joined by North Yemen, formed the ACC. Each had a political motive to forge the pact. All wanted allies to balance against the Gulf Cooperation Council, the Saudi-led alliance of the six Gulf monarchies created during the war. Saddam owed the Saudis billions of dollars in loans from the war, while Amman and Sana’a had longstanding concerns about Saudi expansionism and interference in their internal affairs.

The development of Iraq’s economic relationships with Egypt and Jordan was significantly hindered by its sectarian civil war of the 2000s and the rise of the Islamic State group in the 2010s. But in recent years, the three countries have again taken meaningful steps to rebuild economic ties. In 2017, Egypt began to receive oil from Iraq, after its oil supply was cut off by Saudi Arabia. Jordan began to take delivery of Iraqi oil in 2019. Since at least 2017, the three countries have anticipated undertaking a major joint energy project, linking Iraq’s oilfields in Basra to Aqaba via pipeline, which could be further extended to Egypt. Meanwhile, Iraq has also looked to Egyptian and Jordanian companies for the massive reconstruction projects it will need to undertake to recover from four decades of wars. There are also plans to connect Iraq to Jordan and Egypt’s electricity grids to reduce its dependence on electricity exported from Iran.

Nevertheless, all three countries are cash-strapped — a major challenge for their ambitions. At the end of last year, Egypt and Iraq agreed, in effect, to trade Iraqi oil for Egyptian reconstruction assistance. In the longer run, the three countries will need to look to outside parties for financing.

While Iraq is heading to elections this fall, most of its leaders appear enthusiastic about the partnership’s economic promise. Discussions for the project were already underway during the premiership of Haider al-Abadi. Subsequently, Adel Abdul-Mahdi, on his first trip abroad as prime minister in March 2019, attended the first trilateral summit in Cairo. President Barham Salih met with el-Sissi and Abdullah in New York, on the sidelines of the U.N. General Assembly, in September 2019. Current Prime Minister Mustafa al-Kadhimi headlined Iraqi attendance at the third summit in Amman in August 2020.

Meanwhile, Egypt and Iraq have agreed to implement a comprehensive plan to boost industrial cooperation between them.

Nevine Gamae, the Egyptian Minister of Trade and Industry, said Sunday the plan would contribute to the renovation of Iraqi factories and help share Egypt’s advanced technologies with Iraq.

The agreement was reached during expanded talks between Gamae and her Iraqi counterpart Manhal Aziz al Khabbaz in the Iraqi capital earlier Sunday.

A statement by the Trade and Industry Ministry here said that the meeting also focused on means by which Iraq could benefit from Egypt’s industrial know-how through enhanced cooperation between the private sectors in both countries.

The meeting also took up opportunities of joint industrial investment, especially where the establishment and management of industrial cities is concerned.

Gamae said Egypt wants for Iraq to restore its pivotal role at the regional and international levels. She told Khabbaz that President Abdel Fattah El Sisi’s historic visit to Iraq last week heralded the launch of a new phase at the level of bilateral ties in all fields.

What is behind this alliance?

The visits by Egypt’s President Abdel Fattah al-Sisi and Jordan’s King Abdullah II came as Iraq seeks to move closer to Arab allies of the United States in the Middle East.

Iraq is also seeking to establish itself as a mediator between Arab countries and Iran, after reportedly hosting talks in April between Tehran and Riyadh.

Media reports revealed that Iranian and Saudi officials met in Baghdad in April, their first high-level meeting since Riyadh cut diplomatic ties with Tehran in 2016.

Iraqi analyst Ihsan al-Shamari said that Sunday’s summit was “a message for the United States that Iraq will not only have relations with Iran at the expense of Arab countries”.

Analysts have long said that Iraq is a battleground for influence between arch-foes Washington and Tehran with whom it maintains good relations.

At first glance, a partnership grouping together Egypt, Iraq, and Jordan appears rather strange. One commentator, not without reason, called it an alliance composed of the “region’s odd fellows.” However, Iraq has historically had important economic relationships with both Egypt and Jordan, and in fact the three countries — along with North Yemen — came together in a very short-lived partnership called the Arab Cooperation Council (ACC) from 1989 to 1990. Today, like 30 years ago, economic cooperation lies at the heart of the trilateral relationship. But then and now it has also had strategic goals. And in the longer term, the new partnership potentially heralds a far more ambitious project to bring together not just Egypt, Iraq, and Jordan, but the countries of the Levant more broadly.

Economic cooperation is the driving force behind the formation, but as in 1989, each of the three has a political incentive to come together. Iraq wants to diversify its regional relationships beyond Iran — though it is important to emphasize that Baghdad does not aim to develop its relations with its Arab neighbors at the expense of its relationship with Tehran. Iraq wants friendly relations with both. The Iranians, for their part, might actually look favorably on Iraqi economic cooperation with Egypt and Jordan – if, down the line, they will also be able to benefit economically. By contrast, if Egypt and Jordan, and for that matter the United States, seek to use the formation as a means to isolate Iran, Tehran will undoubtedly sow problems. The extent to which Iran may be allowed to benefit will ultimately depend on the outcome of its ongoing negotiations with the Biden administration.

Egypt and Jordan, meanwhile, want to reduce their dependence on Saudi Arabia. For Jordan, this is particularly critical following reports of Saudi involvement in a recent conspiracy to destabilize the country and replace King Abdullah with former Crown Prince Hamza. The new formation would give Jordan, as well as Egypt and Iraq, greater leverage vis-à-vis Saudi Arabia and the other Gulf countries.

But the most significant, if still implicit, political objective may be to provide a means in the longer term to rehabilitate Syria. Leaders from the three countries have begun to call their formation “the new Levant,” or “al-Sham al-Jadid” in Arabic. Sham is a reference to the city of Damascus, and more broadly to Syria and the Levant. By definition, there cannot be a new “Sham” without Syria. Perhaps unsurprisingly, Egypt, Iraq, and Jordan have let it be known that partnership in their new bloc will be open to other countries in the region, without specifying which. In fact, this aspect of the new formation also has roots in the short-lived ACC experiment. ACC member states did not view their partnership as exclusive, and there was some anticipation that Syria and Lebanon might have joined at some point.

Energy and electrical interconnection projects top the list of economic interests between the three countries, while Baghdad and Cairo support the Jordanian role in the region to fight terrorism.

Ahmed Zaki, director of the Department of the Arab Mashreq, Islamic Organizations and Gulf Cooperation in the Egyptian Commercial Service, told Al-Monitor, “The value of Iraqi investments in Egypt is about $490 million, carried out by about 3,329 Iraqi companies, with capitals exceeding $724 million. Iraq comes in 25th place among the countries investing in Egypt, with 25% of Iraqi companies investing in the industrial sector, 24% in the agricultural sector, 22% in the service sector and 20% in tourism.”

Zaki said the trade balance between Egypt and Iraq is in Cairo’s favor, with a value of $116.231 million during the first quarter of this year.

He noted that Iraq is one of the promising markets for Egypt and has many opportunities for investment, trade and economic cooperation. He added that Egypt’s most prominent exports to Iraq include furniture, cotton, dough, various food ingredients, medicines, oils, iron, silicone, dried onions, soap, cleaning supplies, tiles, ceramic sanitary ware, agricultural crops, clothes, petroleum and carbon products. Egypt also exports vegetables and fruits to Iraq, while it imports chocolate and cocoa products, he pointed out.

Economist Khaled al-Shafei told Al-Monitor that the tripartite summit between Egypt, Iraq and Jordan will create a great economic rapprochement, in light of the cooperation between the three countries in several fields, including trade in goods, services and raw materials.

He said that economic cooperation between the three countries will expand in the coming period, namely when it comes to electrical interconnection projects, as Egypt seeks to become a regional center for energy and export gas to Jordan. This, he said, will lead to further rapprochement as well.

Although it is unclear whether these plans will succeed, especially in the long term, and considering the political and economic uncertainty in all the countries involved, the three Arab states are certainly trying to form an alliance, and may very well succeed in doing so. The question is how long such an alliance would last, and how would surrounding powers deal with thus