US treasury told: No normal trade ties with Tehran till curbs lifted, says govt

Published: December 9, 2014
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Finance Minister Ishaq Dar shaking hand with Iran’s Minister for Economic Affairs and Finance Dr Ali Taieb Nia on Monday. PHOTO: PPI

Finance Minister Ishaq Dar shaking hand with Iran’s Minister for Economic Affairs and Finance Dr Ali Taieb Nia on Monday. PHOTO: PPI

Finance Minister Ishaq Dar shaking hand with Iran’s Minister for Economic Affairs and Finance Dr Ali Taieb Nia on Monday. PHOTO: PPI The ministers also discussed the problem of increased smuggling along the border due to the restrictions on doing business with the Iranian government. PHOTO: FILE
ISLAMABAD: 

Pakistan has informed the United States that it will not fully normalise economic ties with Iran until Washington lifts its sanctions. Islamabad has also expressed its inability to open Iran’s Melli Bank branches and return Iranian deposits.

The decision was conveyed to the US treasury through a letter written by the finance ministry, hours before Pakistan and Iran were set to engage in negotiations to resolve outstanding commercial and economic ties, revealed top officials of the ministry.

“We will deal with Iran only on humanitarian grounds and barter trade is one such option,” said an official while seeking anonymity.

The same message was also delivered to Iran’s Minister for Economic Affairs and Finance Dr Ali Taieb Nia on Monday by Finance Minister Ishaq Dar.

Dr Nia is currently visiting Islamabad to attend meetings of the Joint Economic Commission (JEC).

This is seen as a delicate move by Islamabad to maintain relations with both Washington and Tehran. “At least export of food items to the friendly country should continue until sanctions are eased,” Dar said.

During the two-day Pakistan-Iran JEC meetings that started here on Monday, Dar told the Iranian minister that there would not be any progress on the gas pipeline project before international restrictions were removed.

“Owing to the curbs on Iran, Pakistan has been unable to complete the project on its side,” said Minister of Petroleum and Natural Resources Shahid Khaqan Abbasi during the meeting.

“Despite our best efforts, banks, international contractors and equipment suppliers are not ready to get involved in this project,” Abbasi was quoted as saying in a handout issued by his ministry.

He told the visiting delegation that Pakistan had planned to complete the pipeline in two stages. It was negotiating with Chinese companies for the construction of the pipeline and a 70km portion of the pipeline from Gwadar to the Iran border was to be completed by Pakistani companies.

Dar told his counterpart that his government could not return $216 million to Tehran that the Iranian government had deposited in KASB Bank, which is currently under supervision of the State Bank of Pakistan.

“We offered to supply wheat and rice in return for Iranian deposits,” the official said.

The establishment of branches of Melli Bank of Iran in Pakistan and a Joint Venture Bank was also on the JEC agenda. However, the government said it would not be able to allow opening of Melli Bank branches as the bank was on the US list of entities that were facing sanctions, officials told The Express Tribune. They, however, pointed to the possibility of opening a bank which was not on the US list.

The issue of buying Iranian oil in return for commodities like sugar and wheat was also discussed by both the finance ministers. They also discussed the problem of increased smuggling along the border due to the restrictions on doing business with the Iranian government. Pakistan is said to have deliberately overlooked the issue.

The Iranian minister said negotiations with the international community on the nuclear issue had been successful and hoped that the sanctions would be removed very soon.

He was of the view that with the removal of international sanctions, Iran’s trade volume and economic relations with its neighbours would further improve. During the two-day talks, both sides will also discuss import of energy from Iran – over 1,000MW for Balochistan, according to the finance ministry.

Published in The Express Tribune, December 9th,  2014.

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Reader Comments (7)

  • Sun Tzu
    Dec 9, 2014 - 1:25AM

    India must step up trade with Iran and even explore a free-trade agreement with Iran.

    Recommend

  • kafir-musafir
    Dec 9, 2014 - 1:52AM

    Ahh… Obedient Step Child…. Good Job says Uncle Sam!

    Recommend

  • Shuaib
    Dec 9, 2014 - 3:24AM

    We must look out for our interests. Unless we have a $1-3 trillion economy we can not risk a move to anger Uncle Sam.

    Recommend

  • Shafaq
    Dec 9, 2014 - 9:22AM

    Pakistan should take a bold step in favour of Iran. As we all know that Iran was the first country who accepted Pakistan as a sovereign nation.

    Recommend

  • abreez
    Dec 9, 2014 - 10:58AM

    Iran Exports: $61.22 billion
    Export goods: petroleum (80%), chemical and petrochemical products, automobiles, fruits and nuts, carpets
    Main export partners: China 22.1%, India 11.9%, Turkey 10.6%, South Korea 7.6%, Japan 7.1%
    Iran Imports: $64.42 billion
    Import goods: industrial raw materials and intermediate goods (46%), capital goods (35%), foodstuffs and other consumer goods (19%), technical services
    Main import partners: United Arab Emirates 33.2%,China 13.8%,Turkey 11.8%,
    South Korea 7.4%
    Only Pakistan obey orders of America, Pakistani elite is digging its grave very deeper.

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  • Sodo
    Dec 9, 2014 - 12:35PM

    Post 1979 Era Coming to an End. Dealing wid Current Regime Which has very short time. If World Powers and Iran agreed on Negotiations Bcoz This is Last round. Before new Sanctions. New Sanctions Will make Iran Last days of Saddam’s Iraq.

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  • Parvez
    Dec 9, 2014 - 3:51PM

    With all our leaders personal money in Western banks…….what else does one expect.

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