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Last Updated: 10:07 PM Nov 7, 2021

Pakistan and Iran set a $5 billion trade target for 2023

Pakistan and Iran set a $5 billion trade target for 2023

Picture Courtesy: Express Tribune

#23NewsBulletin – #Pakistan and #Iran have agreed to take steps to boost annual trade to $5 billion by 2023. "The new trade target was understood during the ninth meeting of the Iran-Pakistan Joint Trade Committee held in #Tehran," the commerce ministry said in an official statement released on Saturday. Reza Fatemi Amin, Iran's Minister of Industry, Mines, and Trade, stated that both countries were determined to increase annual trade exchanges. The minister emphasized the importance of accurate programming in order to provide Pakistani partners with the opportunity to invest in #Iran, and he stated that obstacles would be removed within three months to pave the way for the expansion of free trade. Mr. Amin noted that Pakistani and Iranian officials had already held talks on economic cooperation and that the joint trade committee was tasked with laying the groundwork for the two countries' trade ties to be strengthened. He referred to Iran's determination to expand bilateral economic relations, stating that #Iran was willing to remove barriers to developing trade exchanges with #Pakistan in order to strengthen economic ties with the neighboring country. The joint committee works on issues such as the two countries' free trade agreement (#FTA) and organizing exhibitions. Senior Iranian and Pakistani officials, as well as business and banking representatives, attended the meeting. Similar sentiments were expressed by Adviser to the Prime Minister of Commerce Abdul Razak Dawood, who stated that Pakistan wished to expand bilateral trade with Iran. He offered to expand transportation trade, increase the basket of barter trade, build joint border markets, and lower tariffs. Both countries have already made strategic cooperation plans and agreements, according to the adviser, but they have yet to be implemented. "I express my hope that the necessary steps will be taken beginning today," he said. According to Iran's official news agency, #IRNA, the Iranian minister of the industry stated that #Tehran and #Islamabad planned to collaborate in the areas of home appliances and dairy. #Pakistan has a limited export basket to Iran, with rice accounting for 63% of total exports. In 2006, a preferential trade agreement (#PTA) was signed with Iran. Iran received tariff concessions on 309 tariff lines, while Pakistan received concessions on 338 tariff lines. Rice, fruits, cotton, cotton yarn, pharmaceutical products, and cutlery were among the major sectors covered by the PTA. In 2017, both parties agreed to finalize the proposed #FTA by November. Both countries' trade negotiating committees held two rounds of talks on the FTA when it was estimated that the agreement would increase bilateral trade from $300 million in 2016 to $5 billion by 2021. However, the lack of a payment mechanism casts doubt on the viability of a long-awaited agreement. The target of increasing trade to $5 billion in the next two years may also remain on paper until a regular banking channel for a mode of payment is established, according to a senior officer in the commerce ministry. "If there is no payment mechanism, then such an agreement is meaningless," the officer added. While #Iran has approximately 959 joint border crossings with #Pakistan, it is unclear how many will be declared for trade. #23News