Iran, Pakistan agree to ‘expeditiously finalise’ free trade agreement: joint statement

Published April 24, 2024
Iranian President Ebrahim Raisi meets President Asif Ali Zardari on April 22. — Foreign Office
Iranian President Ebrahim Raisi meets President Asif Ali Zardari on April 22. — Foreign Office

Tehran and Islamabad agreed to “expeditiously finalise” a Free Trade Agreement (FTA), a joint statement said on Wednesday as Iranian President Ebrahim Raisi concluded his three-day official visit to Pakistan.

According to a joint statement issued by Iran and Pakistan, “both sides agreed to expeditiously finalise the FTA and hold the next sessions of annual Bilateral Political Consultations (BPC) and Joint Business Trade Committee (JBTC) as well as the 22nd round of the negotiations of the Joint Economic Commission (JEC) in the near future”.

Last month, Iranian Ambassador Dr Reza Amiri Moghadam had said the FTA would increase mutual trade, highlighting the need to have strong air, maritime and sea links.

The joint statement recalled the exchanges and meetings during Raisi’s visit to Pakistan, saying that both sides “reviewed the entire spectrum of Pakistan-Iran bilateral relations”.

Both neighbours also agreed to “enhance mutual interaction through regular exchange of high-level visits”, it added.

Pakistan and Iran also agreed to facilitate a regular exchange of economic and technical experts, as well as delegations from Chambers of Commerce from both countries to intensify economic cooperation.

The declaration of the Reemdan border point as an international border crossing point under the TIR Convention and the opening of the remaining two border sustenance markets was also agreed upon, the statement said.

It added that both countries “affirmed their commitment to transform their common border from ‘border of peace’ to a ‘border of prosperity’ through joint development-oriented economic projects, including setting up of joint border markets, economic free zones, and new border openings”.

“They also reiterated the importance of cooperation in the energy domain, including trade in electricity, power transmission lines and Iran-Pakistan Gas Pipeline Project,” the statement said, recalling their aim to increase bilateral trade volume to $10 billion dollars over the next five years.

“There was consensus to fully operationalise barter trade mechanisms between the two sides to facilitate economic and commercial activity,” the countries said.

Iran and Pakistan “expressed satisfaction at the close and cooperative relations between the two countries in all mechanisms” of the Shanghai Cooperation Organisation (SCO), underscoring the importance of early resumption of the activities of the SCO-Afghanistan Contact Group.

The two sides also called for active cooperation among the regional countries within the framework of the Economic Cooperation Organisation (ECO).

According to the statement, Raisi also extended cordial invitations to President Zardari and Prime Minister Shehbaz Sharif to pay official visits to Iran.

Anti-terrorism cooperation, foreign relations

Iran and Pakistan also agreed on a number of steps aimed at combating terrorism, according to the joint statement.

Recognising that terrorism “posed a common threat to regional peace and stability and presented a major impediment to the development of the region”, the neighbours agreed to “adopt a collaborative approach to confront this menace […] while fully upholding the principles of the UN Charter”.

“Both sides reaffirmed their commitment to the development of Afghanistan as a peaceful, united, sovereign and independent state, free from the threats of terrorism and drug trafficking,” the statement said, adding that the two countries reaffirmed their willingness to “enhance cooperation on counter-terrorism and security and to develop a united front against terrorism”.

Noting the relevance of coordinating regional and international efforts to ensure security and stability in the region, Pakistan and Iran “recognised that increasing participation of all strata of Afghans in basic decision-making will lead to the strengthening of peace and stability in this country”.

The statement further said that both sides “stressed the importance of peaceful settlement of disputes through dialogue and diplomacy”.

The neighbours also expressed their agreement to “release each other’s prisoners and take measures for their extradition based on the Treaty for the Extradition of Criminals and the Accused signed in 1960 and the Agreement on the Transfer of Convicts approved in 2016.

Iran and Pakistan also condemned “rising incidents of Islamophobia, desecration of the Holy Quran and sacred symbols in some countries”. They welcomed the adoption of the United Nations General Assembly resolution titled “Measures to Combat Islamophobia” in March.

On the Gaza conflict, Pakistan and Iran “expressed their strong and unequivocal condemnation of the ongoing Israeli regime’s aggression and atrocities against the Palestinian people”. They called for an immediate and unconditional ceasefire in Gaza, as well as “ensuring accountability of the crimes being committed by the Israeli regime”.

The two sides “strongly condemned the attack on the consular section” of the Iranian Embassy in Syria’s Damascus, calling it a “violation of international law and the UN Charter”.

“Recognising that the irresponsible act of the Israeli regime forces was a major escalation in an already volatile region, both sides called on the UN Security Council to prevent Israeli regime from its adventurism in the region and its illegal acts attacking its neighbours and targeting foreign diplomatic facilities,” the statement added.

Both neighbours also highlighted the need to resolve the issue of India-occupied Kashmir through “dialogue and peaceful means based on the will of the people of that region and in accordance with international law”, it further said.

Raisi wraps up visit

 Iranian President Ebrahim Raisi concludes his three-day official visit to Pakistan at the Karachi airport on Wednesday. — Foreign Office
Iranian President Ebrahim Raisi concludes his three-day official visit to Pakistan at the Karachi airport on Wednesday. — Foreign Office

Earlier on Wednesday morning, Raisi concluded his three-day official visit to Pakistan, during which he visited Islamabad, Karachi and Lahore.

Sindh Governor Kamran Tessori, Chief Minister Murad Ali Shah and Housing Minister Riaz Hussain Pirzada saw off the Iranian president and his delegation at Karachi’s Jinnah International Airport, Radio Pakistan reported.

According to Iran’s news agency IRNA, Raisi left for Sri Lanka’s Colombo on the next leg of his South Asia tour at the invitation of his counterpart Ranil Wickremesinghe. However, Radio Pakistan said that he had left for Iran.

In a statement, the Foreign Office (FO) said Raisi “concluded his maiden visit to Pakistan”.

It said that during his visit, the “two sides held productive discussions and agreed to advance bilateral cooperation in multiple domains, including in trade, connectivity, energy and people-to-people contacts”.

Lahore, Karachi visits on 2nd day

On Tuesday — the second day of his visit — Raisi had visited Lahore and Karachi, with both cities observing local holidays, which were announced to “avoid the consequent inconvenience to the general public”. The Sindh government has also imposed a complete ban on drones in the Karachi division from April 22 to April 28.

The Iranian president had first landed in Lahore, where he met Punjab CM Maryam Nawaz and Governor Balighur Rehman.

Raisi and Maryam had reaffirmed their commitment to enhancing cultural exchanges and fostering people-to-people contacts while Governor Rehman had hosted a luncheon in honour of the president and his delegation.

The Iranian president had also paid a visit to Allama Iqbal’s mausoleum, where he highlighted a “special connection” with Pakistani people and said he did not “feel like a stranger at all” in the country.

Later in the day, Raisi had arrived in Karachi, where he met with CM Murad to discuss Pak-Iran economic opportunities and also held a meeting with Governor Tessori.

During his Karachi visit, Raisi had said Tehran was ready to exchange its prowess in industry, science, and technology with Pakistan. He also expressed his resolve to remove trade barriers between Pakistan and Iran.

Ahead of his visit, the Sindh government had closed all major road links, suspended cellular services in many city districts, and deployed heavy police and Rangers contingents all across the metropolis.

The closure of many important roads in Karachi — including Sharea Faisal, Shahrah-i-Quaideen and M.A. Jinnah Road — even before the time of closure announced by the traffic police had caused inconvenience and hardship to motorists and commuters.

Separately, amid Raisi’s visit to Pakistan, the US State Department had warned that anyone considering business deals with Iran should be aware of the potential risks of US sanctions, as Washington “forbids’ commercial ties with Tehran.

“Let me say broadly we advise anyone considering business deals with Iran to be aware of the potential risk of sanctions,” said the department’s Prin­cipal Deputy Spokes­person Vedant Patel, when asked about efforts to expand trade ties between Pakistan and Iran.

“But ultimately, the government of Pakistan can speak to their own foreign policy pursuits,” the US official added.

High-level meetings on 1st day

On Monday, Raisi had spent a busy day in Islamabad, where the two sides committed to increasing the trade volume to $10 billion over the next five years.

After his arrival in the capital, he had met with Prime Minister Shehbaz Sharif and later addressed a joint press conference, vowing to strengthen relations between both countries at “high levels”.

Later, Raisi also met with President Asif Ali Zardari where they agreed to reinforce existing ties. In his meeting with Chief of Army Staff General Asim Munir, the Iranian president discussed regional stability and border security.

Foreign Minister Ishaq Dar had called on Raisi as well while Interior Minister Mohsin Naqvi and his Iranian counterpart Dr Ahmad Vahidi agreed on both two countries banning terrorist organisations in their respective countries.

Separately, the neighbours signed eight agreements and Memorandums of Understanding (MoUs) for cooperation in various fields. PM Shehbaz and Raisi also inaugurated the newly constructed portion of Islamabad’s 11th Avenue after renaming it Iran Avenue.

Significance of visit

Raisi’s visit to Pakistan had been in doubt as Middle East tensions rose after Iran launched an unprecedented missile and drone attack on Israel more than a week ago in retaliation for an airstrike on the Iranian consular building in Damascus earlier this month. Then, on Friday, central Iran received what was presumed to be an Israeli attack.

Tehran has played down the apparent Israeli attack and indicated it had no plans for retaliation, a response that appeared gauged towards keeping the conflict in Gaza from expan­ding to a regionwide conflict.

Pakistan has called on all parties in the Middle East to “exercise utmost restraint and move towards de-escalation”.

Raisi’s visit is also significant as Pakistan and Iran seek to mend ties after tit-for-tat missile strikes in January. The cross-border strikes stoked regional tensions already inflamed by Israel’s military offensive in Gaza.

Tehran carried out the strikes against an anti-Iran group in Pakistan the same week it targeted Iraq and Syria. Pakistan responded with a raid on “militant targets” in Sistan-Balochistan province. Both countries have accused each other of sheltering militants in the past.

Pakistan is also counting on a joint gas project with Iran to solve a long-running power crisis that has sapped its economic growth.

A $7.5 billion Iran-Pakistan gas pipeline intended to feed Pakistani power plants was inaugurated with great fanfare in March 2013. However, the project immediately stagnated following international sanctions on Iran.

Tehran has built its own section of the 1,800-kilometre pipeline, which should eventually link its South Pars gas fields to Nawabshah.

In February, the outgoing caretaker government in Pakistan approved the construction of an 80km section of the pipeline, primarily to avoid the payment of billions of dollars in penalties to Iran due to years of delays.

Washington has warned that Pakistan could face US sanctions, saying it does not support the pipeline going forward.

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