April 19, 2019
Pakistan will not be signing a free trade agreement with Iran during Prime Minister Imran Khan’s visit on April 21, his adviser on commerce said on Thursday, as Tehran tries to expand its influence and commercial ties to friendly countries to help offset renewed US sanctions.
This is Khan’s first visit to Iran since he took over power last year. The trip will last two days and include a brief stopover in Mashhad before the prime minister goes onwards to Tehran for bilateral talks with Iranian leaders, including Iran’s Supreme Leader Ali Khamenei and President Rouhani.
“No Free Trade Agreement (FTA) will be signed during the visit,” Abdul Razak Dawood, the prime minister’s adviser on commerce. “There will be no discussion on FTA,” he added, saying talks on starting barter trade with Iran would be part of general discussions.
Despite being close neighbors, Pakistan and Iran have failed to enhance bilateral trade volume beyond $400 million in the last five years, mainly due to sanctions imposed on Tehran by Washington.
Pakistan’s business leaders have repeatedly called for a system of barter trade with Iran to help bypass US sanctions.
“Pakistan and Iran should open barter trade to avoid US sanctions,” Dr. Mirza Ikhtiar Baig, Senior Vice Federation of the Pakistan Chambers of Commerce and Industry, told Arab News. “Banking networking approval has been granted by both countries and it should be finalized which banks will be allowed to open branches in Iran and Pakistan.”
“We have lost major trade volumes due to lack of barter trade and absence of banking channels,” Baig said.
Ties between Pakistan and Iran suffered a serious blow in February after Iran said a Pakistani had carried out a suicide bombing that killed 27 members of Iran’s elite Revolutionary Guards near the border with Pakistan.
Iran has repeatedly blamed Pakistan for sheltering militants connected with attacks in the border area, although February’s remarks were the first time Tehran has said Pakistani citizens were directly involved in the attack. Pakistan vehemently denies all charges.