France is increasingly eyeing war-torn Iraq for investment opportunities as trade booms between the two countries despite continuing insecurity and a difficult regulatory environment for foreign companies.
French Trade Minister Anne-Marie Idrac, who arrived in Iraq early on Sunday on the first flight by a commercial airline between Paris and Baghdad in 20 years, said France wanted to increase trade, particularly in the agriculture sector.
Iraq is courting foreign investment as it tries to rebuild itself after decades of war and sanctions.
But many foreign companies remain wary of security risks. While overall violence has fallen sharply in Iraq, attacks by insurgents and militia groups continue daily.
Gunmen attacked a Christian church in central Baghdad on Sunday, detonating three bombs before fighting skirmishes with security forces and possibly taking hostages in the church, a security official said.
In addition, the country is still without a new government almost eight months after an inconclusive election, raising fears of a return to sectarian violence if once dominant Sunnis feel they have been politically sidelined by majority Shi'ites. Insurgents have sought to take advantage of the power vacuum.
French cement maker Lafarge has been a pioneer investor in Iraq, and now controls roughly a third of the domestic cement market. Engineering group Alstom and oil major Total more recently entered the country.
Idrac signed three agreements with Iraq on Sunday, including a deal for the protection of French investment in Iraq and for training in the agriculture sector.
While security remained a concern, Idrac said one of the main obstacles for French companies seeking to invest in Iraq was red tape.
It is extremely difficult for Iraqis to get visas for most foreign countries and generally easier for foreigners to get visas for Iraq. But oil company executives investing in the country also complain about having to wait for hours at Iraqi airports on arrival before being allowed in. Aigle Azur Chief Executive Francois Hersen, who was on his airlines's flight from Paris, said initial passenger interest in the route had not been as high as expected.
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