Pakistan and Iran signed three agreements and a memorandum of understandings to promote trade and commerce ties


Feb 28 - Mar 06, 2005



Being strong in regional trade is stated to be the most important for the economy of any country especially third world countries like Pakistan. Regional trade is must to become or even to plan being strong internationally.

For Pakistan, trade relations with Iran have very significance results. Linking agreements between both neighbouring countries (Pakistan & Iran) is the first most positive step due to their strategic, religious and various other facts. Similarly, trade with India has its own value. Economists have been emphasizing on good regional trade competition so that economic strength should not remain fragile.

The Islamic republic of Iran declared the recent agreements as 'concrete effort' and termed the geographical, historical and cultural proximity of Iran and Pakistan and also their 'good and brotherly' ties despite ongoing crisis in the region, saying that Tehran is looking for full-fledged expansion of bilateral ties, particularly in the economic, scientific and technical sectors. Pakistan said the Joint Economic Commission meeting had been a turning point in promotion of relations in different fields, adding that Iran's ideas on dialogue among civilizations had been highly inspiring. Adding that Iran and Islamabad is unveiling a true path and concept for Muslim Ummah, voicing deep sorrow over lack of proper understanding of Islam. Pakistan and Iran signed three agreements and a memorandum of understandings to promote trade and commerce ties in the presence of Prime Minister Shaukat Aziz and Iranian first Vice-President Dr Reza Aref.

The signing ceremony was held at the Republic Building of the Saadabad Palace upon the conclusion of extensive bilateral talks. One major aspect of the accords is that Pakistan, Iran and India would discuss modalities of the proposed gas pipeline in Islamabad around March 19. Speaking at a news conference after the signing ceremony, the Prime Minister of Pakistan and the Iranian first vice-president termed the developments as good for bilateral relations. Shaukat Aziz described his visit and agreements as very positive and successful with regard to the enhancement of trade and diplomatic ties with Iran.

The first agreement was signed to establish a joint investment company with a $25 million paid-up capital. It will become operational in 90 days and promote investment and broaden areas of industrial and economic cooperation.



According to the second agreement, Pakistan would get agriculture support to raise export of its fruits, mainly kinoo and mangoes to Iran. The two countries had also signed a protocol to amend the Preferential Trade Agreement. It would operationalize tariff and trade regime to expand the level of trade between Iran and Pakistan. An annual trade target of $1 billion was set for the purpose as against the existing $400 million. Provided the MoUs signed to implement and follow-up various decisions taken during the bilateral talks. As per the decisions, Iran would provide a $200 million credit to Pakistan for the development of infrastructure, mainly for the railways and road network. It was also decided to form a committee of the commerce ministers for devising an action plan for trade and remove tariff and non-tariff barriers. Both of the countries have also extended the agreement under which Iran was providing 20 megawatts of electricity to Balochistan. It will now enhance to 50 megawatts. The last decision was that the energy ministers of Pakistan, Iran and India would meet in Islamabad in the middle of March 2005 to discuss modalities for the proposed gas pipeline. Discussions with the Iranian leadership during the Pakistani Prime Minister trip had covered a broad range of subjects, including political issues, diplomatic matters and economic cooperation. Both the sides discussed a host of bilateral issues.

Talking to the media after signing of the agreements, Shaukat Aziz said we have discussed narcotics trafficking in Pakistan and Iran and the measures to prevent it. The Prime Minister, however, regretted that except for Afghanistan, no other country in the region was producing poppy. Its production in Kabul had substantially increased. "This poppy generates drugs which flow in Pakistan and Iran," he said.

Pakistan and Iran also decided to start holding the joint economic commission's meetings after every six months. Moreover, Iran had also given a $200 million credit to Pakistan, which would help it extend engineering services to Islamabad.

"Now this was the job of the Iranian private sector to take advantage of the credit line,  said Dr Reza. He also had held talks with the Pakistan Prime Minister on matters pertaining to terrorism in the region. Answering a question, he said both the countries were important members of the OIC and ECO and their (the bodies') activation would help the Islamic countries on improving the image of Islam.