Islamabad [Pakistan], Nov. 6 : The Iranian authorities have taken a significant leap towards a free trade agreement (FTA) by asking Pakistan to send a delegation to Tehran for kicking off formal negotiations for liberalising commerce between the two neighbouring countries.
The Express Tribune quoted a senior officer in the Ministry of Commerce as saying, "Iran has finally invited Pakistan to bring a delegation by the end of this month or early next month in order to start the first round of talks on the much-awaited FTA." The move comes following Pakistan sending several requests to the Iranian authorities for negotiations on tariff lines, customs duties and other related issues for inclusion in the FTA document.
The officer said that an Additional Secretary leading the delegation will leave in the next three to four weeks and officials of the Economic Affairs Division and the Federal Board of Revenue will be part of the negotiating team.
They will try to finalise the document as quickly as possible The next round of discussion would be held in early 2017 in Islamabad to further streamline the matters, the officer said, adding Pakistan had targeted 2017 for striking agreements with Turkey, Thailand and Iran on free trade.
Input for the draft FTA shared by Pakistan was given by the Iranian authorities, paving the way for beginning formal FTA negotiations.
During the visit of Iranian President Hasan Rouhani to Islamabad in March this year, the two countries had agreed on signing the FTA.
They agreed to switch from the current preferential trade agreement to free trade and push bilateral commerce up to (Dollar) 5 billion per annum over the next five years.
Both sides expressed interest in promoting and expanding bilateral trade as soon as the international community removed longstanding sanctions from Tehran earlier this year.
Soon after, a five-year roadmap was developed by them with the objective of giving a significant boost to trade.
The two neighbouring countries under this roadmap will be opening special bank accounts in their respective currencies in each other's central banks to simplify the payment mechanism for trade transactions.
Arrangements will be made by them to tackle the barriers in the way of bilateral trade such as non-tariff barriers, absence of a mutual recognition agreement, lack of banking facilities, infrastructure bottlenecks and trade through informal channels.