Pakistan, Iran eye early FTA amid $10bn trade target

Pakistan and Iran on Tuesday agreed to expedite negotiations on a long-awaited Free Trade Agreement (FTA), with Commerce Minister Jam Kamal Khan and Iran’s Minister of Industry, Mine and Trade Dr Mohammad Atabak stressing the need to conclude the pact at the earliest to boost bilateral trade.

The 10th Pakistan-Iran Joint Trade Committee (JTC) meeting was held in Islamabad under the joint chairmanship of Jam Kamal Khan and Dr Mohammad Atabak, read an official statement on Tuesday.

Pakistan and Iran reaffirmed their commitment to increase bilateral trade volume to $10 billion.

During the meeting, Jam Kamal said that the time has come to transform the historic brotherly relations between Pakistan and Iran into a strong economic partnership. He emphasised the need to finalise the Pakistan-Iran FTA at the earliest.

Jam Kamal said that removing barriers to border logistics, customs, and cargo movement is imperative.

Islamabad hosts 10th Pakistan-Iran JTC meeting today

“The establishment of joint border markets and electronic data interchange will lead to a significant increase in bilateral trade,” said Jam Kamal.

“The private sector of both countries is ready for trade. It is the responsibility of governments to provide a conducive and reliable business environment.”

Jam Kamal said that the 10th JTC meeting will chart a practical roadmap and take economic cooperation to new heights.

Meanwhile, Iranian Minister Dr Mohammad Atabak described Pakistan as Iran’s long-term strategic trade partner. He expressed the desire to enhance regional trade and logistics cooperation through the ports of Karachi and Gwadar.

The Iranian minister also expressed hope that the Pakistan-Iran FTA would be finalised soon.

Dr Mohammad Atabak termed electricity trade and regional connectivity as new economic opportunities for both countries.

Pakistan and Iran reaffirmed their commitment to further promote cooperation in trade, investment, connectivity, and the private sector.

The meeting reflects the shared commitment of Pakistan and Iran to deepen economic partnership, enhance regional connectivity and create new opportunities for trade and investment.

So far, nine meetings of the Pakistan-Iran JTC have been held. The 9th meeting took place in Tehran from November 6–7, 2021.

Pakistan and Iran have a bilateral Preferential Trade Agreement (PTA), effective since September 1, 2006. Under the PTA, Pakistan has granted tariff concessions to Iran on 338 tariff lines, while Iran has extended concessions on 309 tariff lines. The average tariff concession is around 18%.

However, due to Iran’s restrictive tariff regime, duties applied on Pakistani exports remain significantly higher than those on Iranian exports to Pakistan.