Britain and Iraq unveil up to £12.3 billion trade and defence package

British and Iraqi leaders unveiled a bilateral package in London that officials said could be worth up to £12.3 billion, a move designed to expand trade ties, deepen defence cooperation and accelerate migration returns. Prime Minister Keir Starmer and Iraqi Prime Minister Mohammed Shia al-Sudani presented the package as a step-change in relations between the two countries.

The British government described the commitment as an "up to £12.3 billion export package," a figure the officials noted is roughly ten times the value of UK-Iraq trade last year, implying prior bilateral commerce of about £1.2 billion. Dollar conversions in public statements ranged around $15 billion, with one report citing $14.98 billion. The deal is framed as underpinned by a series of export agreements and will be supported by UK Export Finance, which officials said will provide greater certainty for business deals and help mobilize private-sector financing for large contracts.

Business and trade Secretary Jonathan Reynolds said the announcement "reflects our evolving bilateral relationship and represents a step forward in our growing trade partnership." Prime Minister Starmer described the move as one that "marks a new era in UK-Iraq cooperation, which will deliver mutual benefits from trade to defence," and said it amounted to "a vote of confidence in Britain." Beyond commercial ties, the two governments said they would sign a joint statement to enhance defence cooperation, a measure framed as marking a decade since the Global Coalition mission and Operation Inherent Resolve that helped defeat ISIS territorially.

Officials signalled a wider security and migration package alongside the export component. Senior British military official Cooper said the security agreement has strengthened border controls and intelligence-sharing and that the resources allocated to Iraqi law enforcement are targeting people-smuggling networks, making it harder for criminals "to exploit people" while ensuring they face justice. The leaders also agreed to pursue a migrant returns agreement intended to ensure that people who have no right to remain in the UK can be returned swiftly once the deal is in place.

For markets and firms, the package is significant in scale and signal. Support from UK Export Finance typically reduces political and commercial risk for lenders and insurers, increasing the likelihood that UK exporters and contractors will pursue projects in sectors where Iraq has major demand, such as reconstruction, energy and services. By staging the announcement in London and tying support to state-backed finance, the UK government aims to create commercial opportunities for British companies and to signal a strategic pivot toward deeper engagement with the Gulf and wider Middle East.

Analysts cautioned that the headline figure does not equate to immediate project awards. Public statements did not provide operational procurement details, timelines, or project-level contracts, which will determine how much of the headline value turns into executable work. The package’s durability will depend on contract execution, Iraqi political stability, security conditions and the legal frameworks that govern migration returns. Still, officials framed the accord as a notable recalibration of bilateral ties, marrying economic engagement with security cooperation at a moment of renewed diplomatic outreach in the region.