China-Iran deal | By Omar Shahkar


China-Iran deal

The world of international politics is experiencing tectonic shifts. China is proving to be the biggest threat to US hegemony. China is challenging US in each and every block of the world.

At last, China has also engaged itself in the Middle East politics by securing a 25 year comprehensive strategic partnership with Iran.

The New York Times published the leaked 18 page agreement last year which stated that China would be investing $400 billion.

The investment will be in the sectors of energy, ports, railways, cyber security, transportation & joint venture for weapon design and development. Secondly, a joint bank will also be established that will help Iranian economy.

In return, China will receive heavily discounted Iranian oil & gas for the next 25 years. Now this deal has far reaching implications.

To start with, this 25 years partnership will have strategic & economic implications on New Delhi-Tehran relations. India has already agreed to invest millions of dollars in port and railway infrastructure of Iran.

The main aim to build the Chabahar port was to establish an alternative route to enter Afghanistan bypassing Pakistan. India has committed $13.2 billion in its union budget.

India also agreed to build Chabahar Zahedan railway but that could not be materialized due to US sanctions on Iran.

The Biden Administration is showing little interest in relaxing the sanctions over Iran, India would not be able to honour its commitment.

It’s a massive setback for India as on the other hand China is also a regional competitor of India. And this economic partnership clearly shows that the pearls are beating the diamonds.

Secondly, Pakistan will be the third party that stands to gain the most from the strategic partnership. It has ensured the exit of India from Iran.

Moreover, the deal would improve the relations between Tehran and Islamabad. Friendly relations will have more benefits.

Gawadar and Chabahr can be declared as sister ports and it will increase the trade influx. Recently, an MoU was signed between the neighbouring countries in April.

According to the MoU signed, both sides agreed to establish ‘Border Markets’ along the border.

These will not only enhance bilateral trade but it would also provide economic opportunities and sustenance to people residing in the border areas.

In the first phase, three markets will be opened in the border points and in the second phase of the plan, joint border bazaars will be established in three other border points later.

It is pertinent to mention that as per the agreement, six marketplaces are to be built on the border between Baluchistan and the Iranian province of Sistan-Balochistan.

The two countries are sorting out different ways, including a free trade agreement, to boost their trivial bilateral trade volume. In addition, CPEC can witness a westward expansion.

This deal has the ability to facilitate trade among Pakistan, Turkey, Iran, Azerbaijan and China. In short, it’s a win-win situation for Pakistan.

Lastly, the US Iran ties are expected to experience the fallouts of this deal. Joe Biden agreed to return to JCPOA deal before elections.

The P5+1 deal which was signed back in 2015 during the Obama Administration ,lifted economic sanctions Iran has subjected to in return for a commitment to restrict its nuclear activities. Trump withdrew from the deal back in May 2018 and adopted maximum pressure policy.

Iran is now demanding the lifting of sanctions before agreeing to a new deal. The Beijing-Tehran partnership is a shock to the US policy of adopting maximum pressure.

Iran is now in a very comfortable position and looking to get maximum concessions through smart diplomatic moves.

In a nutshell, this strategic partnership is a blessing in disguise for multiple countries while some are in dire straits.

—The writer is contributing columnist, based in Islamabad.

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