Islamabad: Pakistan and Iran have expressed the desire to sign a Free Trade Agreement (FTA) within six months to increase bilateral trade.
Pakistan’s commerce ministry said that Islamabad and Tehran are keen to “finalise and sign the free trade agreement within six months.” This understanding was reached during the 21st session of the Pak-Iran Joint Economic Commission (JEC) hosted by Pakistan from August 16 to 18 in Islamabad.
The development was reported after the visit of Iranian Road and Urban Development Minister Rostam Gasemi with a delegation of 57 dignitaries. The Iranian delegation held meetings with Pakistani Federal Minister for Commerce Syed Naveed Qamar and his team and Secretary of Economic Affairs Division Mohammad Humair Karim and other senior officers.
Pakistan has free trade agreements with China, Sri Lanka and Malaysia. Pakistan has also signed preferential trade agreements with Iran, Indonesia, Mauritius and Turkey recently.
Islamabad and Tehran signed three MoUs in the fields of maritime, museum, and information broadcasting on the second day of the summit in Islamabad. During the meeting, the two sides “decided to work together to operationalise the barter trade as per the agreement signed between Quetta and Zahedan chambers”, according to the commerce ministry statement. Both sides agreed to discuss the removal of tariff and non-tariff barriers to enhance bilateral trade.
Boost trade and connectivity
Naveed Qamar said that although the current trade volume is far below the true potential of the two countries, Pakistan “is committed to taking all possible measures to increase the bilateral trade volume to the level of $5 billion.” The commerce ministry said that the purpose of the agreement on International Transport between Pakistan and Iran “aims to facilitate trade traffic from Turkey to Pakistan through Iran, while Iranian goods and passengers can have access to China through Pakistan.”
Meanwhile, Pakistan “will have the benefits of access to other Central Asian Republics and Europe through Turkey with the operationalisation of the decisions taken in the 21st session of JEC.”
In December 2021, the Islamabad-Tehran-Istanbul (ITI) freight train service was resumed after 10 years to boost regional tarde and connectivity. The train carrying goods from Pakistan to Turkey via Iran began its journey from Islamabad on December 21, 2021, and arrived in Ankara in around 13 days.
Pakistan signed a Preferential Trade Agreement (PTA) with Turkey last week. Turkish Trade Minister Dr Mehmet Mus and Pakistan Commerce Minister Naveed Qamar signed the agreement in Islamabad in the presence of Prime Minister Shehbaz Sharif. The ‘Trade in Goods Agreement’ is aimed at increasing bilateral trade to $5 billion. Under the agreement, Turkey has offered concessions on 261 tariff lines to Pakistani exporters. In response, Islamabad would offer trade concessions on 130 tariff lines to Ankara. The PTA will come into effect from January 1, 2023.