ISLAMABAD: Pakistan needs to complete the 785km of its own portion of the 2,775km Iran-Pakistan (IP) pipeline, said a trade body chief, adding that it would help boost bilateral trade between the countries.
Federation of Pakistan Chamber of Commerce and Industry (FPCCI) President Abdul Rauf Alam, in an interview with IRNA, said that completion of the project would help boost bilateral trade volume, which is currently very low between the two capitals.
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The pipeline was meant to provide Pakistan with the requisite natural gas, which, due to rising demand and shrinking reserves, was projected to be depleted in a few years. The most economical solution at the time appeared to be the IP pipeline, however, US sanctions meant that the trading currency - US dollar - was no longer operational, thereby leading to a rupture in banking channels and consequently a complete severance of formal trade relations between the two countries - although other countries including India just opted for a currency swap agreement.
Recently, the easing of sanctions meant that Pakistan could once again begin work on the much anticipated pipeline. The SBP has tried to find alternatives to using US dollars, due to lingering restrictions from US - use of euro has been speculated. However, the commerce ministry and SBP have actively tried to facilitate trade ties and Iran’s President Hassan Rouhani’s recent visit to Pakistan augurs well for ties between the two countries.
“Things between Iran and Pakistan have been moving in the right direction,” FPCCI chief added. “Of course the main problem is the banking channel but the private sectors of both the countries are serious regarding doing business,” he noted.
Alam noted that during his recent meeting with Iran’s Ambassador to Pakistan, Mehdi Honardoost, resumption of banking channels was discussed. He said he believed that after resumption of banking channels, bilateral trade volume would increase.
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“The Iranian government is trying hard to remove all barriers in this regard,” Alam stressed. He said the proposed Free Trade Agreement (FTA) between Iran and Pakistan would definitely help improve bilateral trade.
Alam said that $5 billion trade volume was quite a reasonable expectation and it was achievable as long as the two countries remain serious in promoting trade.
Commenting on the upcoming Pakistan-Iran Joint Economic Commission meeting to be hosted by Tehran, he said resumption of banking channel, removing trade barriers and completion of the IP pipeline would remain the main areas to be discussed in the meeting.
Published in The Express Tribune, September 21st, 2016.
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