Iran, Pakistan sign MoU to broaden economic ties, reach $5bn trade target

Iran’s minister of trade, mine and industry signs cooperation document with Pakistani officials to ease trade barriers so Tehran and Islamabad reach their target of 5 billion dollars in their annual trade volume.

6 July 2019
ID : 22089
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Iran and Pakistan on Friday signed a Memorandum of Understanding (MoU) to promote bilateral trade and investment between the two countries.

The document was signed during the first session of the 8th Pakistan-Iran Joint Trade Committee, which was attended by an Iranian delegation, led by Minister of Industry, Mine and Trade (MIMT) Reza Rahmani and Pakistani delegation led by Pakistani Prime Minister's Advisor on Commerce and Textile Abdul Razak Dawood on Thursday in Islamabad, Xinhua reported.

Iranian Minister of Industry, Mine and Trade (MIMT) Reza Rahmani, right, signs MoU with Pakistani Prime Minister's Advisor on Commerce and Textile Abdul Razak Dawood on Thursday in Islamabad. IRAN GOVERNMENT TWITTER (Iran_Gov)

During the meeting, Pakistan urged the Iranian side to take appropriate measures to remove non-trade barriers so that real potential of bilateral trade could be actualized, suggesting removing various forms of taxation such as road and loads taxes on vehicles which are crossing the borders.

Dawood promised to establish a dedicated desk at the Trade Development Authority of Pakistan in Islamabad with the commitment to address the prevalent issues in the future.

Iranian Minister of Industry, Mine and Trade (MIMT) Reza Rahmani, right, holds talks with Pakistani Prime Minister's Advisor on Commerce and Textile Abdul Razak Dawood on Thursday in Islamabad. ARY NEWS

The Iranian side pledged to address all the issues which were hampering bilateral trade on its part, and assured a win-win situation for both sides.

While recognizing the fact that Pakistan-Iran trade relations are not up to the mark, both sides reflected on ways and means to enter into barter trade deal.

"To start barter trade, both countries should select a few items having competitive advantage," Dawood said, adding that in this regard, Pakistan can enhance export of wheat, sugar, rice and fruits to Iran.

Pakistan-Iran Preferential Trade Agreement was signed in 2006. However, it hasn’t been implemented so far.

During the meeting, Iran also showed interest in import of 500,000 tons of rice from Pakistan and asked the Pakistani side to devise necessary mechanism for early shipment.

The Iranian delegation requested the Pakistani government to open more border points, mainly at Ramadan, Pishin and Korak, which will further enhance bilateral trade, Dawn reports.

Target: $5bn trade volume
"Iran desires to develop long term strategic ties with Pakistan," Rahmani told Pakistan’s Minister for Maritime Affairs Syed Ali Haider Zaidi in Islamabad on Friday.

Iran exports 54% of its non-oil exports to the neighboring states, according to the Iranian minister.

"The volume of trade exchanges between #Iran and #Pakistan is currently $1.3bn, but it will increase to $5bn after finalizing the preferential trade agreement between the two neighboring states," Iranian Industry, Mine and Trade Minister Reza Rahmani stressed.

The Iranian minister hailed a “very successful visit” of the Pakistani Prime Minister Imran Khan to Iran, saying that it had opened new vistas of cooperation between the two neighboring states.

Imran Khan visited Iran in April and held talks with senior Iranian officials in a bid to consolidate mutual political and commercial relations.

Rahmani also met Imran Khan on Friday. The Pakistani head of government reaffirmed Pakistan’s commitment to strengthen relations with Iran in diverse fields including people-to-people exchanges.

Iranian Minister of Industry, Mine and Trade (MIMT) Reza Rahmani, left, holds talks with Pakistani Prime Minister Imran Khan in Islamabad on Friday. ASSOCIATED PRESS OF PAKISTAN (APP)

"Economies of Iran and Pakistan complement each other and enhanced trade ties would benefit the people of the two states," noted Iran’s Minister of Industry, Mining and Trade at a meeting with representatives of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).

22% rise in bilateral non-oil trade
Iran traded 229,735 tons worth $105.36 million with Pakistan in the first Iranian month (March 21-April 20), registering a 10.53% and 22.27% growth in tonnage and value respectively compared with the year before, latest data released by the Islamic Republic of Iran Customs Administration (IRICA) show, according to Financial Tribune.

Pakistan was Iran's 10th biggest trading partner during the period under review.

Iran’s exports to Pakistan stood at 207,579 tons worth $75.87 million to register a 9.42% and 13.3% growth in tonnage and value respectively year-on-year.

Pakistan was Iran’s eighth export destination in the world.

Iran exported bitumen, hydrocarbon gas, low-density oils, liquefied propane and fruit juice to Pakistan during the one-month period.

Pakistan exported 22,156 tons of commodities worth $29.48 million to Iran, up by 22.05% and 53.53% in tonnage and value respectively YOY. It was the 13th exporter of goods to Iran during the month under review.

Iran mainly imported semi- and wholly-milled rice, cow, sesame seeds, beef and cans from Pakistan.

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