KARACHI: Office-bearers of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Friday called for the implementation of a free trade agreement (FTA) with Iran on a priority basis.

Noting that the second phase of negotiations concluded last week, they said the FTA’s implementation can increase the bilateral trade volume from $359 million to $5 billion by 2021.

Pakistan and Iran signed a preferential trade agreement in 2004, which came into effect in 2006. Pakistan’s bilateral trade with Iran increased from $622m in 2006 to $1.2bn in 2009, a jump of 194 per cent.

FPCCI official Ahmad Jawad said bilateral trade with Iran consisted of just 2.5pc of Pakistan’s global trade. Pakistan’s exports to Iran constituted 1.4pc of the country’s total exports.

The only significant export to Iran was that of rice. As much as 12pc of Pakistan’s rice exports found a market in Iran, he said.

In 2009 when Pakistan’s exports to Iran peaked, the country exported rice worth $200m. Nearly 80pc of Pakistan’s exports to Iran consisted of rice then.

He said cotton fabric, surgical goods and fresh fruits like kinnos and mangoes hold considerable attraction for markets in Iran.

He said that even though woven fabrics of cotton are a significant export of Pakistan, their sales to Iran are nonexistent. This is despite the fact that Iran’s imports of woven cotton fabrics from the world were $42m in 2016.

“Similarly, exports of medical instruments to Iran hold tremendous potential,” Mr Jawad. He said Pakistan’s current exports of surgical goods to Iran were $780,000 whereas Iran’s imports from around the world were $147m in 2016.

Given the strong potential of Sialkot’s surgical goods industry, a reduction in tariffs on medical instruments should be negotiated and made part of the FTA, he said.

He said the FTA is an opportunity to grow the country’s basket of exports. Mr Jawad said the focus on the export of a single item to Iran may deprive the country of FTA’s benefits.

Published in Dawn, July 22nd, 2017