Pakistan and Iran Set to Finalize Free Trade Agreement

Pakistan and Iran Set to Finalize Free Trade Agreement

Islamabad, April 24, 2024 – In a landmark move to strengthen economic ties, Pakistan and Iran have agreed to expedite the finalization of a Free Trade Agreement (FTA).

This agreement is part of a broader initiative to boost bilateral trade to USD 10 billion within the next five years. The decision came during a high-profile meeting between Pakistani Prime Minister Shehbaz Sharif and Iranian President Dr. Seyed Ebrahim Raisi, who is currently on a three-day official visit to Pakistan.

The leaders discussed various strategies to enhance economic activity between the two nations, including the establishment of joint border markets, economic free zones, and the opening of new border crossings. These initiatives aim to transform their shared border into a ‘border of prosperity’, focusing on long-term sustainable economic partnerships and regional connectivity, particularly benefiting the border provinces of Sistan-Balochistan in Iran and Balochistan in Pakistan.

During President Raisi’s visit, which included a delegation of senior officials like Foreign Minister Amir Abdollahian, the two countries signed multiple accords covering a wide range of sectors. They also agreed to deepen cooperation in energy, a sector where both countries have previously expressed significant interest, especially concerning the Iran-Pakistan Gas Pipeline project and electricity trade.

To solidify these efforts, the two governments plan to hold further sessions of their Annual Bilateral Political Consultations and the Joint Business Trade Committee. Additionally, they will convene the 22nd round of negotiations for the Joint Economic Commission shortly. These meetings are designed to facilitate the exchange of economic and technical experts as well as delegations from the chambers of commerce, enhancing overall economic cooperation.

In a joint statement, both nations committed to fully operationalize barter trade mechanisms and declared the ‘Reemdan border point’ as an international border crossing under the TIR Convention to ensure efficient and barrier-free trade. This comes alongside the joint effort to operationalize two additional border markets, aiming to foster local development and direct trade.

Reflecting on connectivity, both sides expressed satisfaction with the current shipment of goods under the TIR Convention and committed to enhancing infrastructure links, including connecting the strategic ports of Gwadar and Chahbahar. As active members of the Belt and Road Initiative (BRI) and the Economic Cooperation Organization (ECO), both countries are keen to leverage these platforms to boost connectivity and infrastructure development.

The discussions also covered broader regional and global issues, including the situation in Afghanistan and the need for a peaceful resolution in Kashmir in line with international law and the will of the people. The two leaders condemned terrorism in all its forms and agreed on a collaborative approach to confront these challenges while upholding the principles of the UN Charter.

The meeting also tackled issues of mutual legal and security concern, agreeing on the importance of combating threats such as terrorism, narcotics smuggling, and human trafficking. Both sides pledged to strengthen cooperation in counter-terrorism and security measures.

Overall, the visit underscored a mutual commitment to not only enhance bilateral ties but also to work together on significant regional and global challenges. As President Raisi concluded his visit, both leaders looked forward to the rapid implementation of their agreements, setting a positive tone for future interactions and cooperation between Iran and Pakistan.