A business delegation, headed by Iran Chamber of Commerce, Industries, Mines and Agriculture Chairman Gholamreza Shafei, is scheduled to visit Pakistan’s Karachi and Lahore cities from Oct. 25-29.
Accompanying the delegation will be Abdolhakim Rigi, the head of Iran-Pakistan Chamber of Commerce, and representatives of Iran’s private and public sectors in the fields of agriculture, food, oil, gas, petrochemicals and chemicals, construction materials, minerals, pharmaceuticals, medical equipment, technology, startups and transportation, the news portal of ICCIMA reported.
The mission is scheduled to hold trade forums and B2B meetings in Pakistan’s Federation of Chambers of Commerce as well as Karachi and Lahore’s chambers of commerce. Meetings will also be held with Pakistani government officials to explore ways of expanding commercial interactions and barter trade, and prepare the ground for the formation of Iran-Pakistan Trade Council and Dispute Settlement Council.
The delegation is also scheduled to visit factories and industrial sites in the two Pakistani cities.
Those interested in accompanying the delegation have until Oct. 4 to register through https://chambertrust.ir/iran-pakistan.
Barter Trade Deal
Pakistan’s English newspaper The Express Tribune recently reported that a barter trade agreement with neighboring Iran has been signed, thanks to the relentless efforts of the local trade community, and businessmen from across the country should take advantage of the deal.
This was stated by President of Quetta Chamber of Commerce and Industry Fida Hussain Dashti. He added that this trade would greatly benefit the business communities of both countries.
He noted that they had made a promise and it had been turned into a reality, which is a great opportunity for the traders of the province.
“The initiation of barter trade between the two neighboring countries will provide employment to the jobless and improve the economic condition of the country and the province,” Dashti said.
He said those interested in barter trade should register with the Quetta Chamber of Commerce and Industry, and start their business operations.
Dashti, Muhammad Ayub Mariani and Amjad Ali Siddiqui said the Pakistan-Iran Barter Trade Agreement was signed and necessary steps were also taken in this regard with the close assistance of relevant departments and institutions to successfully implement the deal.
“The business leaders worked together with the authorities, as a result of which ID [Barter Trade Module] has been allotted to the Quetta Chamber of Commerce by the Federal Board of Revenue for barter trade and wayback automation. The system has come into effect, after which Pak-Iran barter trade is going to start,” Dashti said.
“We are happy that the chamber of commerce has consulted with the stakeholders in industry and commerce,” he said, stressing that another promise has been fulfilled.
The president of Quetta Chamber of Commerce said this has been a longstanding demand of the business community of the province, as the start of barter trade will help eliminate unemployment in the province and improve the economic condition of the country and the province.
Dashti said it was a good news for the business community across the country that now they can do barter trade with Iran.
“Those interested in barter trade could consult and register with Quetta Chamber of Commerce and Industry to take advantage of this opportunity,” he concluded.
Free Trade Agreement
Pakistan and Iran have decided to finalize and sign a free trade agreement within the next six months with the aim of increasing bilateral trade, the Commerce Ministry of Pakistan said recently.
The decision was taken at the 21st session of Pakistan-Iran Economic Commission hosted by Pakistan from August 16 to 18, Pakistan Observer reported.
The two sides also decided to work together to operationalize barter trade as per an agreement signed between Quetta and Zahedan chambers of commerce. Both sides agreed to discuss the removal of tariff and non-tariff barriers to enhance bilateral trade.
On the sidelines of the commission meeting, the chambers of commerce of the two sides decided to promote more frequent business-to-business integrations.
Pakistan Businesses Forum Senior Vice President Muhammad Riaz Khattak recently said Pakistan has a narrow export basket with Iran, as 63% of its export is rice.
A preferential trade agreement was signed with Iran in 2006. Tariff concessions were granted to Iran on 309 tariff lines whereas Pakistan was given concessions on 338 tariff lines. Major sectors covered under the PTA include rice, fruits, cotton, cotton yarn, pharmaceutical products and cutlery. In 2017, both sides decided to finalize the proposed FTA by November that year.
The trade negotiating committee of both countries held two rounds of discussions on the FTA when it was projected that the agreement would increase bilateral trade from $300 million in 2016 to $5 billion by 2021. However, unavailability of a payment mechanism casts a shadow on the viability of the much-awaited agreement, the Nation reported.
While Iran has about 959 joint border crossings with Pakistan, it remains to be seen how many border crossings will be declared for trade. Under the existing trade regime, bilateral trade, as per statistics, was slightly in favor of Tehran.
Khattak briefed the media that now full-fledged barter trade between Pakistan and Iran may likely resume in December. He said according to official sources all barriers on the transit trade have been abolished on a trial basis and Iranian apple would hit the market soon.
Through the trade mechanism, Pakistan would export 1 million tons of rice to Iran. Pakistan also exports kinnow and other products to Iran. He said due to various US/international sanctions imposed on Iran, Pakistani banks have been reluctant in opening letters of credit (LC) for export to Iran despite the repeated appeal on the part of exporters and traders of the country.
The absence of a credible payment mechanism remains the major irritant in the way of Pakistan-Iran trade. International sanctions, particularly those imposed by the US and European Union in 2010, have targeted Iran’s banks.
The sanctions prevented Pakistani banks from doing business with their Iranian counterparts, including the opening of LCs, which is the most credible method for carrying out international trade transactions. Trade was conducted through alternative payment mechanisms of limited scope, such as cash and to a certain extent through barter.
