Iraq, US launch strategic talks, with tempered expectations

Two Iraqi officials said Kadhemi has been invited to the White House this year, a diplomatic olive branch his predecessor Adel Abdel Mahdi had never received.

"There was a lack of confidence in the relationship with the previous government, and we're not there anymore," one of the officials said.

- Troops in the balance -
The launching session, planned for 1300 GMT, includes a range of diplomatic, military and economic staff from both countries that will split into follow-up committees.

The main event will be the fate of US-led troops, deployed in Iraq from 2014 to head a military coalition fighting the Islamic State group.

"Whatever comes out of the dialogue is going to set the future of our strategic relationship," a top American official from the coalition told AFP.

"Am I still going to fly surveillance drones or not? Do you still want our intelligence?" he added.

The coalition has already consolidated to just three bases in recent months, down from a dozen, and the talks would likely bring a further drawdown.

"There are no details yet on troop levels, but the US draft on a joint statement mentions a 'reduction of US forces'," one senior Iraqi official told AFP.

But a dramatic or sudden drop could hamper the coalition's efforts to back an Iraqi fightback against IS sleeper cells, which have escalated attacks in recent weeks.

Other coalition countries are watching from the sidelines, with no formal role in the negotiations.

"The ability of non-US members of the coalition to be in Iraq depends on whether the US can stay. We're tied down by this dialogue, too," a Western diplomat told AFP.

Iran and its allies in Iraq, which have vowed to oust US troops, are also keeping a close eye on the talks.

Many reiterated calls for foreign forces to leave, with the spokesman for the pro-Iran Fatah bloc, Ahmad al-Assadi, insisting on a six-month deadline for their departure.

On Monday and Wednesday, two rockets hit near Baghdad airport and the American Embassy, after weeks of calm.

But the rhetoric was more tempered than usual, with even the hardline Kataeb Hezbollah saying it would take a formal stance on the talks only after the first session.

"These groups are retrenching, which gives Kadhemi some space with the Americans," said Ford.

- The economy, stupid -
One area where Iraq may see only limited progress is help for its collapsing economy, which relies almost exclusively on oil exports.

Faltering prices and low demand have drastically shrunk Iraq's monthly revenues, leaving Baghdad scrambling to pay wages, pensions and welfare to eight million Iraqis.

A US waiver protecting it from American sanctions as it imports gas from neighbouring Iran for its dilapidated power sector is due to expire in late September.

Thursday's talks are geared to produce long-term support, like infrastructure upgrades using American energy companies and US endorsements for aid from Gulf countries, the World Bank and the International Monetary Fund.

But Iraq needs an immediate crutch.

"The US won't provide all kinds of cash. They can just offer not to apply sanctions," said Ford.

"That doesn't fix Kadhemi's single biggest problem," he said -- a lack of hard cash.


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