Pakistan and Iran have agreed to formulate a five year strategic plan to triple bilateral trade which is less than the real potential between the two neighbouring Muslim countries. This decision was taken at the 6th meeting of Pak-Iran Joint Trade Committee (JTC) held on 12-13 January, 2011 at Islamabad.
Pakistani team was led by the Commerce Minister Makhdoom Amin Fahim whereas Iranian team was headed by the Commerce Minister Dr Mehdi Ghazanfari. Official sources told Business Recorder that Iranian Minister expressed reservations over the opening of Letters of Credit, which is costlier for the companies of his country. Presently, Iran is interested in transactions transfer through a Karachi-based Pakistani bank. Both countries also agreed to constitute a Joint Working Group (JWG) comprising public and private sector representatives from both sides.
The Joint Working Group will take stock of the following: (i) Annual target of 25 percent increase in bilateral trade; (ii) improvement of infrastructure , roads, railways; (iii) deepening of Pak-Iran PTA, inclusion of more items; (iv) exploring the possibility of Free Trade Agreement(FTA); (v) removal of non-tariff barriers; (vi) increased co-operation between trade promotion organisations of the two countries; (vii) enhanced private sector co-operation; (viii) private sector joint investments; (ix) holding of Single country exhibitions and participation in specialised exhibitions; and (x) direct flights between Pakistan and Iran.
According to an official announcement both sides reviewed implementation of decisions of 5th JTC held in Tehran on 11-12 May, 2009. With regard to expansion of Pak-Iran PTA, both sides agreed to expand the PTA and discussed the priority wish list of Pakistan and Iran exchanged in the meeting of technical experts held in Islamabad on 24-25 August 2009.
An MOU was signed between Trade Development Authority of Pakistan (TDAP) and Iran Trade Promotion Organisation (ITPO) for bilateral co-operation initialed during the 5th JTC held in Tehran in May 2009.
The teams of both countries expressed the desire of holding of single country exhibitions and the Iranian side expressed the desire to hold a single country exhibition in Karachi in 2011 and Pakistan agreed to provide space for the said exhibition. The next meeting of Pak-Iran Joint Business Council (JBC) will be held next on 26-27 January 2011 in Islamabad. The Iranian side agreed to host the first Joint Working Group meeting in Tehran within four months.
Iranian Commerce Minister also met with the Prime Minister Syed Yousuf Raza Gilani and discussed matters of mutual interest. Iranian Commerce Minister stated that impediments to benefit from Free Trade Agreement (FTA) need to be removed to further enhance trade relations. He argued that business transactions between the two countries through Asian Clearing Union (ACU) take more time as compared to normal L/Cs. Opening of L/Cs through Iran's sister companies in Dubai also add to total cost. He also stressed upon opening of branches of Banks in each others countries.
The Iranian Minister of Commerce mentioned that at present Iran has trade with the world to the tune of $150 billion mainly with western countries including US and EU. The trade with UAE, he said, has reached $15 billion while with India it has increased to $12 billion.