Coll 17/18(2) 'Smuggling between Kuwait and Iraq' [‎25v] (50/889)

remained as high as at present, which was not certain, as
local tariff arrangements might always be reached to facilitate
trade. -but once all goods from Kuwait had to pay full import
duty into Iraq, there would be no reason to send them via
Kuwait. In fact Kuwait would have no raison d’etre as an
entrepot for Iraqi imports.
«
5. The Shaikh’s attitude was, then, that he could and
would completely stop smuggling into Iraq once his trade with
Saudi Arabia was re-opened; hut that this would in fact stop
all trade between Kuwait and Iraq - so why devise elaborate
and cumbersome machinery for its ’’canalization"?
6. I replied that I did not think the cases were so
very different. I saw little prospect of Saudi duties being
reduced, and in either case-it would no doubt be of doubtful
advantage, once full import duties were levied on the land
frontier, to import through Kuwait goods which could equally
well be importea to Saudi Arabia or Iraq direct. but I
thought there would still be some trade e.g. in order to
avoid the payment of basra port dues etc., and I thought that
proper arrangements ought to be made to enaole legitimate
trade to exist. Anyhow I was convinced that, on wider
grounds, it would be good policy for the Shaikh to agree,
even if the effect in the end should be much the same as
total prohibition.
7. de Saury thought that it would probably be much
simpler for the Shaikh simply to promise to stop all
smuggling into Iraq - a promise which he saw no reason why
the Shaikh could not fulfil, since he has absolute
patriarchal power in his principality - as soon as an
agreement for the re-opening of Kuwaiti trade with Saudi
Arabia should have been concluded.
8. I objected to this that it would be a virtual
admission that alb smuggling was carried on at present with
the Shaikh’s connivance, and would be making an offer from
which it might be difficult to retreat.
9. de Saury eventually said that if we all attached
real importance to an arrangement being made quickly for the
"canalization" of Kuwaiti-Iraq trade, corresponding to that
now under negotiation for the canalization of Kuwaiti-
Saudi trade, he saw no insuperable objection himself, though
he still thought the, arrangement would be valueless and
cumbersome and that a total stoppage of smuggling (and of
trade; would oe preferable.
10. I said I would discuss the matter further with
Kowle, to whom I am taking a copy of this letter tomorrow.
11. de Saury made several interesting points which I
have left to the end, as they do not, I think, affect the
main argument. One was that, however much the Kuwaitis may
profit from smuggling he is convinced that the main
organization is Iraqi, and that a numuer of highly placed
Iraqis, and also Iraqi police, particularly in Hejef and
Kerbala, are "in" on it. There has, of course, been a lot
of material on this already, and I am not sure that the
embassy and the Gulf authorities have always agreed about the
facts. besides it is obvious that the Kuwaitis must have
an/