Iran and Iraq have announced a re-implementation of the Algiers Agreement signed in 1975 to resolve long-standing border disputes that had led several clashes between the two states.
The decision was taken during Iranian President Hassan Rouhani’s official visit to Iraq. The visit comes at a time when Tehran has been isolated by US sanctions, supported by Israel and Saudi Arabia - regional arch-rivals of Iran.
But why does a decades-old agreement matter for Iraq and especially for Iran, and what does this rapprochement mean for regional and global dynamics?
The Algiers Agreement
Iranian leader Mohammad Reza Shah Pahlavi and Iraq’s then vice president Saddam Hussein signed the Algiers Agreement on March 6, 1975, focusing mainly on two key issues: demarcation of land and river boundaries, and the exercise of strict border control.
The treaty also ended an Iraqi offensive against the country’s Kurdish minority in the north as a move to implement Saddam’s Arabisation policy to increase the Arab population in the country’s north. It also required Iran to stop supplying weapons to Kurdish groups.
However, Saddam intensified its attacks in later years.
The agreement equally divided the Shatt al Arab river between Iran and Iraq, and later served as the basis for other bilateral treaties, including economic ties.
In 1979, Iraq under Saddam’s leadership withdrew from the agreement, and the riverbed has changed significantly since the agreement first signed, with Iraqis claiming they lost territory.
Remapping the area through modern techniques is one of the aims of the renewed agreement.
Why it matters, what does Iran get out of it?
Iran has been trying to expand commercial ties with Iraq further as its economy has been hit hard by US President Donald Trump’s decision last May to pull out the 2015 nuclear deal between Iran and six major powers.
The 2015 agreement had lifted the sanctions in return for Iran curbing aspects of its nuclear programme, but Trump pulled out the deal.
The Trump administration said the accord was too generous and failed to rein in Iran's ballistic missile capabilities and its involvement in regional conflicts in Syria and Yemen.
Other signatories to the deal in Europe have been trying to salvage the pact, but US sanctions have mostly scared off European companies from doing business with Iran.
EU countries 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 agreement unless EU powers demonstrably protect its economic benefits.
Iraq and Iran announced that tourism, pilgrimage, and commerce visas would be allowed to citizens of both nations starting from April 1.
Moreover, Tehran said it would help with the reconstruction of Iraq, and Iranian construction companies stand to benefit to the tune of billions of dollars in reconstruction projects.
Iraq, which relies on Iranian gas imports to feed its power grid has asked for extensions to a US waiver to continue importing Iranian gas and will be gaining privileges for Iraqi companies investing in Iran.
Is the US being pushed out of Iraq?
Increasing Iranian presence and influence in Iraq may alarm Washington.
Since the US invasion of Iraq in 2003, Washington has kept troops in the country for different stated purposes from 'bringing democracy' to settling what they call the growing discontent between Shia, who are in the majority, and Sunnis.
The US renewed its justification for staying in Iraq saying it would not leave until Daesh is completely eradicated from the region.
Trump recently criticised both the US invasion of Iraq and his predecessor Barack Obama’s decision to pull out of the country, even though he has similarly announced a US withdrawal from Syria.
In an interview with CBS's Face the Nation, Trump strongly advocated for a continuing American troop presence in Iraq.
“And one of the reasons I want to keep it is because I want to be looking a little bit at Iran because Iran is a real problem,” Trump said.
His remarks, however, made the Iraqi leadership angry.
Iraqi President Barham Salih, who is considered a Washington ally, said that the US should not overburden Iraq with its issues.
Rouhani arrived in Iraq on Tuesday for a three-day visit. He met his Iraqi counterpart, Barham Salih, Prime Minister Adil Abdul Mahdi, some political and religious leaders as well as tribal representatives in Baghdad. He later went to Karbala.
Rouhani is expected to meet Ali al Sistani, one of the most prominent Shia religious authorities, in Najaf on his last day.