ISLAMABAD: Negotiations between Pakistan and Iran on Free Trade Agreement (FTA) will begin in October this year, according to the federal minister for commerce Khurram Dastgir Khan in a meeting with Mehdi Honardoost, Ambassador of Iran to Islamabad.
The federal minister for commerce said that FTA talks between Pakistan and Iran will likely to begin in October as the FTA draft that Pakistan sent to Iran in June this year was approved by Iran and will be pursued vigorously.
It is worth mentioning here that both the counties had signed the five year strategic trade cooperation plan during Iranian President Hasan Rouhani’s visit to Pakistan in March 2016 and it was decided to start negotiations on FTA in June 2016. This not happened so far because of the lack of interest from the Iranian side. Both countries have to share the draft of the free trade framework agreement with each other before starting the negotiations on this FTA.
According to available documents, both countries have agreed to provide tax concessions on 80 per cent items in the Free Trade Agreement. Presently, Pakistan and Iran are enjoying concession on 18 per cent of items in the Preferential Trade Agreement (PTA). According to PTA, Pakistan has given concessions to Iran on 338 items Iran has reciprocated by providing concession on 309 items to Pakistan. It is worth mentioning here that both the countries’ officials have agreed to complete the talks on the FTA by December 2017.
Presently, Pakistan and Iran’s mutual trade volume is $270 million and with the implementation of FTA, it is slated to rise to $5 billion in five years. Khurram Dastgir Khan informed the ambassador that the Pakistani Cabinet on Wednesday (today) is likely to approve the re-establishment of Pakistan-Iran banking relationship that will boost bilateral trade significantly.
On this occasion, the Iranian ambassador said that the two brotherly Islamic countries must focus on developing economic and trade ties. He said there are lots of grounds and avenues of cooperation in economic and trade spheres. “Both countries have large population of young people and the enhancement of bilateral trade will help both countries create job opportunities for the youth”,
The ambassador discussed the ways and means for further improving bilateral trade between Pakistan and Iran. “Both countries must work on developing long-term economic and trade policies, initiate interaction between Free Trade Zones and have more exhibitions,” suggested the ambassador.
The Minister also informed the ambassador that both countries should work on easing the visa process for businessmen and also should agree on list of items to zero-rate each other in order to uplift trade between the two neighbouring states. The ambassador appreciated the positive response of the minister and both sides agreed to hold further meetings on different levels to give practical shape to various proposals discussed in the meeting.
