ISLAMABAD

Pakistan on Tuesday showed interest to negotiate a free trade agreement (FTA) with Iran after United States and European Union lifted sanctions on Tehran.
"Lifting sanctions from Iran has provided Pakistan with a historic opportunity to raise mutual trade and investment to new heights as the leaders of the two nations envisioned in their meeting in 2014," said Federal Minster for Commerce, Khurram Dastgir Khan. Pakistan is interested to negotiate a FTA with Iran and draft of the agreement template can be forwarded to the authorities concerned in Iran as soon as they express their willingness, he added.
Bilateral trade that was nearing $1billion reduced drastically as a result of sanctions and the unwillingness of banks to finance trade. Pakistan and Iran had agreed in 2014 on a five-year trade facilitation plan to enhance bilateral trade to $5 billion following the removal of sanctions imposed on Iran on ground of its peaceful nuclear programme. However, the volume of bilateral trade could start increasing after sanctions lifted on Tehran.
Sources in the ministry of commerce informed that Pakistan and Iran could start negotiations in the upcoming month of February. "The trade between two countries was affected due to the international sanctions and lack of banking facilities," said an official of the Ministry of Commerce. However, Pakistan and Iran can now start trade negotiations after United States and European Union lifted sanctions on Tehran.
"The banking sectors of the two countries will establish active linkages within weeks to facilitate the traders to channel their payments. In the past few years, lack of recognized and trustable payment mechanism through banks proved to be the single largest factor hindering bilateral trade," Commerce Minister said in a meeting with the newly appointed Ambassador of Iran to Pakistan Mehdi Honardost. He was of the view that the next logical step after a Preferential Trade Agreement is an FTA and Pakistan couldn't find a better time to initiate negotiation on new trade agreement than right after the removal of sanctions from Iran. New circumstances merits new agreements and enhanced cooperation for the mutual benefit of the two neighbors, he added.
The minister added that the last hurdle in resuming smooth trade relations between the two countries have been taken away thus providing opportunity to implement the projects which have been in limbo since last few years.
Pakistan wants more predictability in tariffs from Iran on agricultural produce and their products. Iranian duties on agriculture fluctuate widely depending upon the time of harvest ranging from on-seasonal highs to off-seasonal lows. The two sides need to agree on Sanitary and Phyto-Sanitary standards as this proves an unwanted barrier in bilateral trade.
The conclusion of an FTA between Pakistan and Iran and inclusion of Iran back into the world trading system would bring more predictability and clarity and the seasonal shifts in duties and trading pattern would give way to surer trading regime
Dastgir said that Pakistan has plans to construct the three border posts on the Iranian border on modern lines with twenty first century infrastructure in order to facilitate the land trade. These posts will be linked through a single road which would be further connected with the main arteries leading north.
The Iranian Ambassador showed his government's resolve to reactivate the trade relations after the removal of sanctions especially with the immediate neighbors. He was of the view that the supply of Iranian energy can prove to be a turning point for Pakistan's economy.