Prime Minister Shehbaz Sharif greets Iranian President Seyyed Ebrahim Raisi on his arrival at the Prime Minister’s House, on Monday.—White Star
Prime Minister Shehbaz Sharif greets Iranian President Seyyed Ebrahim Raisi on his arrival at the Prime Minister’s House, on Monday.—White Star

• Both sides agree to ban terror outfits; COAS stresses need for better coordination along border
• Iranian president pushes for activation of ‘trade in border areas’; eight MoUs signed
• Shehbaz, Raisi call for efforts towards unconditional ceasefire in Gaza

ISLAMABAD: Pakistan and Iran on Monday committed to increasing their annual trade volume to $10 billion over the next five years, as part of an understanding to deepen relations across all sectors.

This was agreed during a meeting between Prime Minister Shehbaz Sharif and Iran­ian President Seyyed Ebrahim Raisi, who is on a three-day visit to Pakistan leading a delegation comprising cabinet ministers, senior officials, and business representatives.

In addition, the interior ministers of both countries decided in principle to ban terrorist organisations in their respective countries, while also increasing cooperation in border management, including steps for prevention of smuggling and drugs trafficking, the Associated Press of Pakistan reported.

President Raisi, in his media statement, described the current level of bilateral trade as “unacceptable” and “as a first step” decided to raise this to $10 billion. The new target set by the two leaders looks highly ambitious given that the trade between the two countries last year stood at about $2.3 billion despite a significant boost in trade after the two countries signed MoUs for facilitating bilateral trade in Jan 2023.

Later in August, the two sides chalked out a five-year trade plan for realising the 2021 goal of increasing trade to $5 billion.

Since 2005, the two countries have been operating under a preferential trade agreement and have been negotiating a free trade agreement, which many anticipated would be concluded during the Iranian president’s visit.

Several factors have impeded trade growth between Iran and Pakistan, including international sanctions on Iran, security issues in border regions, and inadequate border infrastructure as well as economic misalignment.

Moreover, banking and payment issues due to the lack of direct banking channels and the necessity to comply with international financial regulations hinder smooth economic interactions.

Fluctuating political and diplomatic relations influenced by external geopolitical pressures also affect the execution of bilateral trade agreements. The two sides, which share nearly 900km of border, are specifically eyeing the development of border markets to increase trade.

Border trade

Iranian President Dr Seyyed Ebrahim Raisi speaks to President Asif Ali Zardari during a meeting at Aiwan-i-Sadr. —APP / White Star
Iranian President Dr Seyyed Ebrahim Raisi speaks to President Asif Ali Zardari during a meeting at Aiwan-i-Sadr. —APP / White Star

In his media remarks, Mr Raisi highlighted the long border between the two neighbouring countries as a significant opportunity for enhancing bilateral relations. He acknowledged that some measures have already been taken to facilitate border trade, but described these efforts as “insufficient”.

Emphasising the need for further action, he advocated for additional steps to “activate trade and business in border areas”. President Raisi expressed that increasing commercial activity along the border would not only improve security but also boost the welfare of the communities residing in these regions.

Pakistan and Iran had in May last year inaugurated the Mand-Pishin market, one of the planned six border markets that are to be jointly constructed by the two countries.

Separately, in a meeting bet­ween Interior Minister Mohsin Naqvi and his Iranian counterpart Dr Ahmad Vahidi, both agreed on a joint plan of action to deal with the menace of terrorism by further improving mutual support and exchange of intelligence information. Both sides also resolved to sign a security agreement in this regard.

It was also decided to provide all possible facilities to the Pakistani pilgrims on the occasion of Arba’een. The Iranian interior minister extended an invitation to his Pakistani counterpart to visit Iran in that regard where the Iraqi counterpart would also be invited.

Pak-Iran gas pipeline

It was widely expected that the leaders of both countries would in their meetings discuss the fate of the stalled Iran-Pakistan gas pipeline especially after Islamabad earlier this year decided to construct an 80km line within its territory to pre-empt Tehran from initiating arbitration in international courts that could potentially lead to a penalty of $18 billion.

“Probably, you can find some individuals who do not favour expansion and promotion of good bilateral relations between Iran and Pakistan but who cares? It is not important,” Mr Raisi said referring to the critics of Pak-Iran ties.

A PMO statement also mentioned a commitment by both leaders to expanding cooperation in the energy sector, but did not specify any project.

Security along Pak-Iran border

The Iranian leader inspects a guard of honour on his arrival at the PM House, on Monday.—APP / White Star
The Iranian leader inspects a guard of honour on his arrival at the PM House, on Monday.—APP / White Star

Border security also remains a significant area of contention between the two countries. This region has become a breeding ground for drug trafficking, smuggling, and the movement of militant groups.

Tensions escalated in January when Iran struck suspected militant hideouts inside Pakis­tan. In response, Pakistan targeted sanctuaries of suspected Baloch separatists in Iran, leading to a temporary downgrade of diplomatic ties. However, both countries quickly acted to mend the rift.

Mr Raisi cursorily touched on the issue noting the commonality of views on fighting terrori­­sm, organised crime, narco-trafficking and other manifestations of instability. According to the PMO statement, PM Shehbaz and President Raisi agreed to “develop joint approaches to confront common challenges including the threat of terrorism.”

Meeting with army chief

In another meeting President Raisi discussed regional stability and border security with Chief of Army Staff Gen Asim Munir.

According to an ISPR statement, both sides concurred on the necessity to bolster bilateral cooperation while jointly striving for regional stability and economic prosperity.

Gen Munir emphasised the need to improve coordination along the border to prevent terrorists from jeopardising the longstanding relations between the two neighboring countries, ISPR said.

Gaza crisis

Both PM Shehbaz and President Raisi in their comments expressed strong and unequivocal condemnation of the ongoing genocide in Gaza by Israel and reiterated the call for international efforts to an immediate and unconditional ceasefire.

Though PM Shehbaz reminded Mr Raisi of Iran’s support for the Kashmir cause, the Iranian leader avoided mentioning that in his comments.

Separately, Foreign Minis­ter Ishaq Dar called on Mr Raisi after his arrival at the Nur Khan Airbase. He also met President Asif Zardari. President Raisi will also travel to Lahore and Karachi.

Eight MoUs signed

Pakistan and Iran signed eight MoUs aimed at enhancing bilateral cooperation across a broad spectrum of areas.

These agreements, signed in the presence of PM Shehbaz and President Raisi, included a security cooperation agreement to bolster mutual security measures and an agreement on judicial assistance focusing on civil matters to enhance legal collaboration.

Additionally, an agreement to promote film exchange and cooperation in the audio-visual sectors was established, marking a significant step towards cultural exchange.

Published in Dawn, April 23rd, 2024

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