By Wendy Lubetkin
Washington File European Correspondent

Geneva -- Iraq has been formally granted observer status -- the first step towards World Trade Organization (WTO) membership -- by a consensus agreement of the WTO General Council.

"This is a good day for Iraq, and it gives me great pleasure to come here today to thank you on behalf of the government and people of Iraq for accepting our request," said Ahmad Al-Muktar, director general of foreign economic relations at Iraq's Ministry of Trade.

He spoke to the General Council after the February 11 decision.

"It is an important step for Iraq towards integration into the global economy," he said. "After decades of isolation, Iraq is beginning to rejoin the international community, and your decision today sends a positive signal to the people of Iraq that they are welcomed back and that the world really cares about their welfare."

Ambassador Peter Allgeier, deputy U.S. trade representative, said the United States was "pleased to join with our fellow WTO members today in collectively welcoming and accepting Iraq's outstretched hand."

"In pursuing this request, Iraq has made clear its commitment to the rule of law and the principles that underlie the WTO," Allgeier told the General Council. "Of particular note is the importance that they attach to the WTO as part of their ongoing efforts to rebuild their economy. We believe that these efforts hold great promise to the people of Iraq."

Talking to reporters afterward, Allgeier said WTO participation should bolster Iraqis' domestic economic reforms "as they look at the sorts of disciplines and transparency that we have in the WTO."

Observer status is considered a stepping stone to accession, and countries granted observer status must begin the process of moving towards full membership within five years.

Al-Muktar said observer status will give Iraq a better understanding of the WTO and "Iraqis who had been forced into isolation by the previous regime will get the chance to benefit from the vast resources available at the WTO to learn and to build their capacity."

Speaking with reporters after the meeting, Al-Muktar said Iraq wants to start the process of accession "as soon as possible" and has already amended some laws and taken a number of other steps to adjust to WTO requirements.

He added that he believed news of Iraq's WTO observer status would have a positive psychological impact in Iraq.

"This is a very strong signal to the Iraqi people that the international community has accepted them back. And that is essential. I think it has a big psychological impact," Al-Muktar said.

"As you know my country is now going through very severe times. We are in a stage of instability," he said. "And we hope that any step taken in improving the economy of Iraq would contribute positively to the easing of this horrible situation."