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. Last Updated: 07/27/2016

Germans Use Iron Curtain Ties in Iraq

BERLIN -- German companies, excluded by the United States from government contracts in Iraq after Chancellor Gerhard Schr?der's opposition to the war, are using contacts dating from before the fall of the Iron Curtain to win business.

Rolfeckhard Giermann, East Germany's trade envoy in Baghdad in the 1980s, is helping as many as 20 small and medium-sized companies including Kranbau Eberswalde and Oddesse to negotiate contracts with Iraqi businesses for products from fire extinguishers to cranes and sewage systems.

In the decade before German reunification in 1990, East Germany's Communist government sold almost $500 million annually in goods to Iraq, making the Arab country its No. 4 trading partner. As Iraq rebuilds after the U.S.-led war to topple Saddam Hussein, demand for German products is returning.

"German technology is well-known and widely appreciated in Iraq: There's great potential for future business," Giermann said. His company, Tasco, is based near Berlin. Schr?der's pledge to keep Germany out of any war with Iraq helped him win a second term in last year's national election. German-U.S. ties were soured after Schr?der called a military attack to oust Hussein an "adventure" during the campaign.

Following the U.S.-led invasion of Iraq, U.S. President George W. Bush's administration denied the United Nations the lead role in managing the rebuilding of the Arab country. The U.S. House of Representatives tried to include a clause in a bill on reconstructing Iraq that barred German, French, Russian and Syrian companies from U.S. government contracts.

The U.S. has come under fire for limiting bids to companies such as Halliburton, the Houston-based company run by Dick Cheney before he became vice president. On July 10, the U.S. Army Corps of Engineers tendered two contracts worth as much as $1 billion to repair Iraqi oil wells, after being criticized for awarding Halliburton the original contract without seeking bids.

The cost of rebuilding Iraq's infrastructure could be as high as $100 billion, Paul Bremer, the top U.S. administrator in Iraq, told CNBC on Friday.

Half of Iraq's corn mills, two-thirds of its water and wastewater pumping stations and 80 percent of railroad signalling devices were manufactured by East German companies before 1990, said Giermann, who has paid more than 50 visits to Iraq since 1993. In the 1970s and 1980s, Iraq was the country's fourth-biggest trading partner after the Soviet Union, West Germany and Poland.

Iraqi businessmen say they would welcome more investment from companies in Europe's largest economy. Sard Cars, Baghdad's No. 1 dealer of second-hand automobiles, said a fifth of the 500 cars in its showroom were built by BMW and DaimlerChrysler.

Sard Cars is planning to renovate its premises and wants to contract a German company to design and equip them.

"We're very impressed with technology from Germany. It sells very well," said Rasiq Marmur, head of customer sales at Sard. "It's a blank check for German business in Iraq in the future."

"The doors to Iraq's economy are open for our small and medium-sized companies -- the prospects are quite good," said Ludolf von Wartenberg, executive director of Germany's BDI industry federation, representing 107,000 companies including Siemens and Bayer.