Pakistan signed a preferential trade agreement with the Islamic Public of Iran to increase bilateral trade within six months, on 4th March 2022. Pakistan’s commerce ministry said that Islamabad and Tehran are keen to “finalize and sign the free trade agreement within six months.” This understanding was reached during the Pak-Iran Joint Economic Commission’s 21st session, hosted by Pakistan from August 16th to 18th.
A senior officer in the Ministry of Commerce said, “We have recently got back the initial draft that we shared earlier with the Iranian authorities; they have given their input and agreed to push ahead with the plan.” He also said, “Now, we will soon start formal negotiations on tariff lines, duties and other matters to finalize the document as quickly as possible” and “a Pakistani delegation will leave for Iran most probably by next month to start talks on the FTA.”
It was also agreed last month to open special bank accounts in Pakistani and Iranian central banks in their currencies for streamlining the payment mechanism for trade transactions. Both sides have highlighted scores of challenges that will be addressed to achieve the trade objectives. Pakistan-Iran bilateral trade came down from $1.5 billion before the pandemic to $1 billion.
Islamabad and Tehran also signed three MoUs in the fields of maritime, museum, and information broadcasting on the second day of the summit in Islamabad. The two sides “decided to work together to operationalize the barter trade as per the agreement signed between Quetta and Zahedan chambers,” according to the Ministry of Commerce’s statement.
Both of the countries had signed a preferential trade agreement (PTA) in 2006, which experts say “failed” to push the Pakistan-Iran trade balance beyond $1.5 billion, with US sanctions playing the spoilsport.
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