DURING his visit of Pakistan, Iran’s Foreign Minister Dr. Mohammad Jawad Zarif first met with Chief of Army Staff General Qamar Javed Bajwa. The two sides discussed the changing geopolitical situation and matters pertaining to regional peace and stability. Pak-Iran border management also came up for discussion. Militants sneak in into Baluchistan from the bordering Iran’s province for terrorist activities and targeting security forces. While addressing the meeting, the COAS emphasied that enhanced cooperation between the two countries would have a positive impact on regional peace. The Iranian Foreign Minister appreciated Pakistan’s positive role for regional stability, especially facilitating the Afghan peace process. Later Dr. Jawad Zarif had a meeting with Foreign Minister Shah Mehmopod Queersh and discussed expansion of bilateral cooperation in areas of trade and security.
Over the past several years, the volume of bilateral has shrunk from $1.16 billion in 2010 to $283 million in 2015-16. Pakistan exports fell from $207 million to $32 million in during the past fiscal year. There is no credible and sustainable payment mechanism to facilitate expansion of bilateral trade. The US sanctions on Iran prevented Pakistani banks from doing business with their Iranian counterparts, which is the most fast and dependable mechanism of settlement of trade claims. Currently, small volume of bilateral trade is done through cash payment and barter mode.
Iran is keen to raise the volume of trade to $5 billion by 2021. Pakistan can outdo its competitors in the Iranian market by exporting rice, meat, meat products, citrus fruits and auto-parts. It can export auto-parts worth $400 million to Iran. Likewise, Pakistan can import relatively cheaper crude oil, petroleum products, vegetables and dry fruit. At present, tomatoes are being imported through cash payment and barter mode. There are bold indications that next year Joe Biden administration will rejion the Iran Nuclear deal and lift economic sanctions that were imposed on Iran by Donald Trump administration. Lifting of economic sanctions will pave the way for boosting Pak-Iran trade. Possibility of importing Iranian crude oil on deferred payments or open-ended foreign exchange regime can be explored by free convertibility of currencies of both countries.
Another area of trade cooperation was import of Iranian gas through pipe line. The construction of Pakistan’s segment of 1000 kilometer long pipeline for gas import was hit by the US-EU sanctions. The construction work was due to commence in 2012. On January 30, 2013 federal government approved a deal with Iran form laying Pakistan’s section of the pipeline. On February 27 construction work on this segment was agreed and on March 30 the ground breaking ceremony was performed by former President Asif Ali Zardari. But the project hit snags. On May 27, Iran’s Deputy Petroleum Minister A. Khaledi expressed concern over the delay in execution of construction work in a letter to Pakistan. However, on June 12, 2013 previous PML-N government assured Iran that the project has not been abandoned. In November, a friendly country offered financial assistance of $ 1 billion for funding of gas pipeline project. The same year a meeting was held between Pakistan’s Minister for Petroleum Shahid Khaqan Abbasi with his Iranian counterpart Bijan Namdar Zangeneh at Tehran and assured that project would continue despite external pressure.
