Pakistan is interested in negotiating a Free Trade Agreement with Iran in the wake of lifting of sanctions imposed by the United Nations, a Pakistani minister said.
Commerce Minister Khurram Dastgir Khan speaking with Iran’s top envoy to Pakistan Mehdi Honardost in Islamabad said a draft for such negotiations can be immediately made available if Iran desires.
The United Nations, European Union and the U.S. last week announced to remove sanctions after Iran met requirements by the deadline of implementing the nuclear deal reached earlier last year. The move enabled Iran to resume oil imports and return to the global economy.
Khan said lifting of sanctions has provided neighboring Pakistan with a “historic opportunity” to raise mutual trade and investments. Pakistan already had a Preferential Trade Agreement with Iran.
“New circumstances merits new agreements and enhanced cooperation for the mutual benefit of the two neighbors,” he added.
The Minster said that the banking sectors of the two countries can establish active linkages within weeks to facilitate the traders to channel their payments. In the past few years, lack of recognized and trustable payment mechanism through banks proved to be the single largest factor hindering bilateral trade.
Bilateral trade which was nearing $1 billion was reduced drastically as a result of sanctions and the unwillingness of banks to finance trade. The Minister added that the last hurdle in resuming smooth trade relations between the two countries have been taken away thus providing opportunity to implement the projects which have been in limbo since last few years.
Pakistan wants more predictability in tariffs from Iran on agricultural produce and their products. Iranian duties on agriculture fluctuate widely depending upon the time of harvest ranging from on-seasonal highs to off-seasonal lows.
The two sides need to agree on Sanitary and Phyto-Sanitary standards as this proves an unwanted barrier in bilateral trade.
Pakistan has plans to construct the three border posts on the Iranian border on modern lines with twenty first century infrastructure in order to facilitate the land trade. These posts will be linked through a single road which would be further connected with the main arteries leading north.