PAKISTAN and Iran have agreed to increase their bilateral trade from the existing $3 billion to $10 billion, in a move that signals closer ties and focus on trade in the backdrop of recent developments in the region, which highlighted strategic dimensions of their relations.
The commitment came during talks of Prime Minister Shehbaz Sharif with Iranian President Massud Pezeshkian during the latter’s first official visit to Pakistan after assuming the office. The red carpet welcome that the Iranian leader received on his arrival when the Prime Minister personally received him at the Nur Khan Airbase reflected not just one of the rare protocol gestures but also the desire of Pakistan to promote multi-dimensional ties with Iran. This sentiment proved to be a reciprocity as highlighted by statements, remarks and gestures of the visiting dignitary during talks with the Pakistani leadership and the overall outcome of the visit.
The visit of the Iranian President itself assumed special importance as it came on the heels of the Iran-Israel conflict when Pakistan provided rock-solid support to the brotherly country and attempts were made by some countries to isolate Tehran. In this backdrop, by hosting the Iranian leader, Pakistan has, once again, demonstrated its resolve to pursue an independent foreign policy that suits its national interests. Seen in the backdrop of signing of vital agreements, mutuality of interests and high-sounding commitments expressed by the leadership of the two countries, the visit was not a formality or PR exercise but is likely to go a long way in basing bilateral ties on a strong and practical foundation. Hopefully, political and economic bonds will be reinforced with the inking of twelve agreements and Memoranda of Understanding (MoUs) aimed at promoting cooperation in diverse fields including science and technology, information and communication technology, agriculture, trade, tourism, culture and mass media.
No timeframe has been specified for realization of the ambitious target of increasing bilateral trade by $07 billion but appreciably the two sides have vowed to direct the relevant authorities and departments to take practical measures for the purpose. It is important that tangible steps are also taken to curb smuggling and provide incentives for formalization of trade besides removal of tariff and non-tariff barriers that have hindered growth of bilateral trade in the past. The understanding reached during the visit to accelerate trade, remove border bottlenecks and build trust-based partnerships across priority sectors also augurs well for strengthening of economic relations. There are also prospects for initiation of joint ventures and promoting investment which should be exploited through intensive mutual discussions. Pakistan Minister for Commerce Jam Kamal has also made relevant proposals – the need to organize targeted trade delegations that include representatives from federal and provincial chambers of commerce, enabling focused discussions on market access and regulatory facilitation – which can form the basis for promotion of trade and investment.
Referring to the importance of trade corridors, Jam emphasized that beyond bilateral gains, such connectivity could expand to Turkey, Central Asia, Russia and even parts of the Middle East, creating an economic bloc of substantial power and resilience. Another aspect that needs to be taken care of by the two countries is the tendency to consider Gwadar and Chabahar as rivals whereas the two have the potential to complement efforts aimed at acceleration of regional trade and connectivity. Pakistan has expressed its readiness to deepen its economic relationship with Iran through structured channels like the Joint Economic Commission (JEC), regular B2B exchanges and sector-focused delegations and time is ripe to exploit this widow of opportunity to take economic relations to new heights. It is also pertinent to note that the two countries have agreed on the importance of identifying specific sectors such as agriculture, livestock, services, energy and cross-border logistics for future collaboration but the real issue is the pace of progress for realization of agreed goals.
