Pakistan should get ready to trade with Iran

According to a Dawn report the revival of the Joint Comprehensive Plan of Action (JCPOA) signed between Iran and leading super powers in 2015 is likely to present Pakistan some of the rarest opportunities. It will not only open up new avenues for closer economic engagement between the two neighbors, but access to oil, gas oil and minerals.

According to credible media reports, JCPOA is expected early next month. To earn Iran’s trust and to convince the world of the US intent, President Joe Biden has restored some sanction waivers early this month. These breaks would allow firms around the world to trade with Iran.

The private sector, aware of the US hostility towards Iran and its dominant position in the global market, particularly over capital flows through the banking system.

Razzak Dawood, advisor to Prime Minister on commerce, did not divulge much on the possibility of visiting Tehran to explore possibilities. Responding to Dawn, he did not hide his lack of interest. “I am looking into it.”

The reports from Vienna are calming in a global environment of growing geopolitical rivalries threatening whatever is left of Covid-battered economies. If the growing energy insecurity amidst rising oil prices and vanishing fears of Western backlash kick-start the Pakistan-Iran oil pipeline project, it will be a real boon for the people and the private sector groaning under the burden of rising fuel prices, hoped an incorrigible optimist.

Journalist-turned-politician Senator Mushahid Hussain Syed was hopeful of a positive outcome if the sanctions are lifted on Iran and the financial flows are eased. The partial sanction waiver by the United States is good news for Pakistan. as it will open up opportunities for boosting commercial cooperation between the two neighbours. Coupled with US humanitarian sanctions waiver for Afghanistan after January 23-25 Oslo meeting, this augurs well for lowering tensions in the region.

“While Iranian minister’s visit was linked more with cross-border security issues, especially terrorism in Balochistan, last year’s opening of a third border crossing point between Pakistan and Iran can provide an impetus for bilateral trade and travel.

“The biggest issue was that, fearing Western retaliation; Pakistani banks were not willing to open a letter of credit (LC) for legitimate overland trade. Perhaps, eventually, the Pakistan-Iran pipeline deal can also be revived. Iran can provide energy security to Pakistan which would strengthen the economy.

“An additional force multiplier for Pakistan-Iran economic ties is the China-Iran strategic economic agreement,” he responded in writing when reached for his input.

Dr. Manzoor Ahmed, former Ambassador of Pakistan to the World Trade Organization (WTO), lament limited trade and implicitly blamed a weak foreign policy.

“Pakistan has a very low trade volume; its exports to Iran can be multiplied manifold. Despite sanctions, India’s exports crossed US$3 billion as it allowed Iran to buy in Indian currency,” he said.

In the past, it was not US sanctions alone, but also the Saudi pressure that prevented Pakistan from deepening trade ties.

Pakistan should start preparing for the post-sanction period. It enjoys potential to diversify its energy import sources. Both the countries enjoy a long common border. There is also a probability of opening more border posts.

Pakistan has already signed a preferential trade agreement with Iran. The time has come to reciprocate the good will gesture of Iran.