Thursday February 22, 2024

‘Pakistan-Iran FTA must be finalised soon’

By Our Correspondent
January 18, 2023

KARACHI: Pakistan and Iran should soon finalise the free trade agreement (FTA), which has been pending since a long time, leader of a trade delegation from Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA) Morad Nemati said on Tuesday.

Although a preferential trade agreement exists between Iran and Pakistan, in order to further improve the existing trade volume, the two countries should finalise the FTA, Nemati said during a visit to the Karachi Chamber of Commerce and Industry (KCCI).

He urged the chamber to push the government to expedite the Iran-Pakistan FTA and give it a final shape so that the trade between the two countries could substantially be improved as per potential.

He further stressed the need for making collective efforts to remove trade barriers, with focus on reducing the gap between the business communities, which was a major issue hindering trade and investment cooperation.

In addition to removing trade barriers, the two sides should further promote barter trade to boost the existing trade ties.

“Enhanced trade and investment ties with the business community of Karachi are very important to us, hence, we are concentrating on improving our connections with the business community of this city where an Iranian Single Country Exhibition is currently underway at the Expo Center,” he said, inviting the KCCI to also send a trade delegation to Iran for exploring avenues of trade and investment cooperation.

Iranian dairy industry, construction sector and other important sectors of the economy have witnessed significant growth, the business communities of the two should look into the possibility of undertaking joint ventures in these sectors.

Earlier, KCCI Senior Vice President Touseef Ahmed, while welcoming the Iranian delegation, said that despite excellent brotherly relations, the bilateral trade volume was below the potential of $5 billion.

He said it was time to upgrade the existing Pakistan Iran Preferential Trade Agreement (PTA) to FTA, which would take bilateral trade to the next level and develop deep financial and economic cooperation.

“The existing barter trade basket also needs to be expanded to other products to facilitate imports and exports between the two countries and further deepen Pak-Iran economic integration,” he added.

Ahmed said that the Joint Trade Committee’s consensus to ensure phase-wise implementation of border markets and investors’ access to the special economic zones would not only strengthen cross-border economic cooperation, but also discourage illegal border trade. This, he said would subsequently improve formal trade between the two countries.

He pointed out that the unavailability of a payment mechanism was a major hurdle, therefore, both countries need to explore other workable payment mechanisms like local currencies. “To broaden the economic ties, the Pak-Iran gas pipeline project also needs to be prioritised.”

KCCI Vice President Haris Agar also stressed the need for having a banking channel between the two countries, which would substantially raise the existing trade volume.

Presently, the business communities were unable to directly send and receive payments due to lack of banking channel, which was a major hurdle in improving trade.