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.

Razak and hawks poles apart on trade with India

According to a Dawn newspaper report, Abdul Razak Dawood, Adviser to the Prime Minister on Commerce, Textile, Industry and Production, and Investment has said that trade with India is the need of the hour and beneficial to both countries. 

“The trade with India is very beneficial to all, especially Pakistan. And I support it,” he added.

“As far as the Ministry of Commerce is concerned, its position is to do trade with India and my stance is that we should do trade with India and it should be opened now,” Dawood said.

Dawood said something which is logical and need of the hour. Many others believe once Pakistan and India start with Trade it would be only a matter of time to open other doors.

Many analysts believe that if Pakistan continue to beat the drum that there will be no trade with India unless article 370 is re-instated, then in the next 100 years Pakistan will not be able to do trade with India.

They also say that many hawks, who play a key role in Pakistan’s policy insist on banning trade, travel, sports and people to people contact with India. Therefore, whatever Razzak and likeminded people are saying does not matter.

It may be recalled that in the recent past EEC made a decision to allow import of cotton from India, but the decision was taken back on the insistence of Prime Minister Khan. It may be said the Khan is also under the pressure of hawks.

The people privy to the decision making process say that at times open and backdoor diplomacy sound hoax call, because hawks know exactly how to discourage trade with India.    

South Korea and Iran to resume oil trade

South Korea and Iran are working closely on resuming oil trade and unfreezing Iranian funds, said South Korean Foreign Ministry. The country was previously one of Iran's leading Asian oil customers. The move coincides with negotiations resuming in Vienna to revive Tehran's 2015 nuclear agreement with world powers.

Tehran has repeatedly demanded the release of about US$7 billion of its funds frozen in South Korean banks under US sanctions, saying Seoul was holding the money hostage.

"Our side expressed hope for the resolution of issues related to sanctions such as the transfer of frozen funds upon the agreement on the restoration of the Joint Comprehensive Plan of Action (JCPOA) now underway in Vienna," a South Korean statement said, using the full name of the nuclear accord.

The Iranian side stressed the importance of an early resolution of the matter of the frozen funds, it added.

Iran and South Korea are also discussing the trading of crude oil and oil products, on the condition sanctions are lifted as progress is made in nuclear negotiations, the statement said.

Previously South Korean oil buyers chiefly imported condensate, or an ultra-light form of crude oil, from Iran.

In Tehran, the Iranian Foreign Ministry spokesman Saeed Khatibzadeh said Iran saw the talks as a possible indicator of attempts to re-establish trade ties with South Korea.

"This expert meeting's results can be seen as a test of South Korea's seriousness to solve existing problems between the two countries and normalizing ties, including through oil and condensate sales to Korea and Korean firms' investments in Iranian projects," Khatibzadeh told state media.

"Therefore, Iran will carefully follow up on the results of these negotiations in considering how to regulate relations between the two countries," Khatibzadeh added.

The United States reimposed sanctions on Iran in 2018 after then President Donald Trump withdrew from the nuclear deal under which Tehran agreed to curb its nuclear program in exchange for US sanctions relief.

South Korea, the world's fifth-largest crude buyer, imported a total of 12.6 million tons of crude in January against 10.3 million tons a year ago, preliminary data from the Korea Customs Service showed. 

The biggest challenge for Biden

The biggest challenge for US President Biden leadership is brewing crisis caused by Russian aggression against Ukraine. The stakes are high for Biden, after the chaotic withdrawal from Afghanistan that prompted widespread criticism and left allies questioning US leadership. 

Political observers say that the unfolding situation represents an opportunity for Biden to demonstrate American leadership and draw a contrast with former President Trump’s handling of Russian President Vladimir Putin.  

“More than anything, he has to show all these people that he is not the weak and frail leader Republicans say he is,” said one Democratic strategist. “In this case, it’s about perception more than anything else.”

There are also some political risks, especially if the crisis spirals into war and impacts the domestic economy. 

With an eye toward the upcoming midterm elections, Republicans have tried to paint Biden as weak on issues of domestic and foreign policy.

But Democrats like the contrast between Biden’s approach to Russia and how Trump, who spoke warmly of Putin and exhibited deference to the Russian leader, dealt with the Kremlin. They think this will be an effective response to any GOP attacks on Biden’s approach to the crisis. 

“Foreign policy is one of those areas where presidents can look or seem presidential,” said Basil Smikle, a Democratic strategist and director of Hunter College’s public policy program. 

“Particularly in the post-Trump environment where we all have been witness to the Trump-Putin bromance, if you will, I think voters will be able to see, number one, Biden on the world stage looking presidential, and two, can he look presidential against Putin where Donald Trump did not,” Smikle said.  

In a recent speech from the White House, Biden pledged to give diplomacy “every chance” to resolve the crisis while issuing a stern warning to Russia against invading Ukraine.   

“The world will not forget that Russia chose needless death and destruction,” Biden said.

“Invading Ukraine will prove to be a self-inflicted wound.”  

Biden administration officials have warned a Russian invasion of Ukraine could happen at any time, but Russia sent some signals that it may be willing to de-escalate. Biden is likely to receive credit if conflict is avoided, while he may incur some blame if the situation spirals out of control.  

Biden’s approach to the crisis has been focused on uniting allies behind a common approach to pushing back against Putin’s provocations and preparing a sanctions package that would cause pain to the Russian economy if it were to launch a renewed military invasion of Ukraine.   

Biden has been firm in his engagements with Putin, proposing “swift and severe costs” in the event of an invasion in a phone call over the weekend. He has sent thousands of troops to defend NATO allies in Eastern Europe while being clear that US troops will not be sent into Ukraine to fight Russia. The troop movements have even won some praise from Republican lawmakers.  

Much of the economic impact of a full-scale Russian invasion of Ukraine is expected to be centered in Europe, but it could drive up energy costs in the US, compounding the price pressures Americans are already facing.  

Biden acknowledged this possibility during his address on Tuesday and said his administration is “taking active steps to alleviate the pressure on our own energy markets.” 

“I will not pretend this will be painless,” he said. 

The Biden administration has been trying to fend off a potential energy crisis by engaging with countries and major energy companies to find a way to offset any energy shortage, given Europe’s reliance on Russian gas. 

Republicans have hammered Biden over inflation for months, seeking to convince voters that his policies are to blame and that he’s doing little to address high prices.  

“International crises could change the maps at home,” said Alex Conant, a GOP strategist.  

The economy and the pandemic will always matter a lot to people, Conant said, but if an international conflict escalates to the point that it affects the domestic economy or troops have to be deployed, it could definitely influence people’s views when voting.

Observers say this particular foreign policy scenario is different from the Afghanistan withdrawal that many see as a pivotal, negative point in Biden’s approval ratings as president. 

“I think the situation in Russia/Ukraine is quite different politically than Afghanistan,” said Richard Fontaine, the CEO of the Center for a New American Security who served as a foreign policy adviser to the late Sen. John McCain.  “The worst-case scenario is a full-scale invasion of Ukraine and if it happens, it will be despite the administration's efforts to avert it. If Putin is determined to go forward, no one is going to stop him.   

“That, I think, is different than Afghanistan, where at issue was a US policy of withdrawal implemented by the United States — and over objections from some of our allies.”  

The Afghanistan withdrawal struck at the heart of the competency message that Biden relied on during his successful presidential campaign. It was followed by a drop in the president’s domestic poll numbers that have not recovered as the nation grapples with the enduring coronavirus pandemic and inflation.  

There is limited data thus far on views of the Russia-Ukraine crisis and Biden’s handling of it. 

A CBS News poll released last week found that 70% of Democrats believe Biden’s approach to Russia is “about right,” while 44% of independents said the same. Only 16% of Republicans said his approach is “about right,” while 59% said it is too friendly and 25% said it is “too hostile.” 

Democratic strategist Rodell Mollineau said the White House has handled the crisis well to date.  

“This administration, the amount of communicating they’re doing on this is important. It shows Russia and the Ukraine that the US is invested, and it shows the American people this is something the US takes seriously,” Mollineau said.  

At the same time, Fontaine observed that the current crisis could have adverse political ramifications for Biden if it consumes his time and takes his attention away from other priorities of the Biden administration. 

“If that goes on indefinitely, it could produce opportunity costs for other administration priorities, in both foreign and domestic policy,” he said.  

Democrats say whatever happens, it’s unlikely to be a defining issue in this year’s midterms or the presidential race in 2024. 

As Democratic strategist Eddie Vale put it, “The 2022 and 2024 elections are going to hinge on what happens in Kenosha, not Kyiv.” 

 

Iran-Uzbekistan Joint Economic Committee Meeting Scheduled

Iranian Industry, Mining and Trade Ministry will hold 14th Iran-Uzbekistan Joint Economic Committee meeting on February 20-21, said an official of Trade Promotion Organization (TPO).

Director General of TPO’s United States and Europe Office, Mohammad-Reza Karimzadeh said on Friday that the 14th Iran-Uzbekistan Joint Committee meeting has been convened in Tehran for the promotion of trade among the two countries.

Expert committees have held talks in recent days to coordinate the preparation of the draft for a memorandum of understanding (MOU) between the two countries on economic, investment, customs, transportation, energy, health, scientific, technological, tourism, cultural and agricultural arenas, Karimzadeh said.

The official further noted that given the importance of enhancing relations between the private sectors of the two countries, the organizers also plan to hold a seminar on trade opportunities of the two nations on the sidelines of the mentioned meeting at the venue of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) on February 21, 2022.

Talking about the significance of the Joint Economic Committee meeting in developing the trade and economic relations between Iran and Uzbekistan, the Iranian official said, Uzbekistan is one of the important markets for Iranian commodities. Iran’s exports to Uzbekistan have witnessed significant growth in recent months, Karimzadeh said.

Iranian Deputy Foreign Minister for Economic Diplomacy Mehdi Safari said on February 17, 2022 that the Islamic Republic is going to hold two joint economic committee meetings with Uzbekistan and Kazakhstan in Tehran in the coming days separately.

It is expected that holding such meetings will help sign promising agreements for future cooperation in different fields, Safari noted.

According to the Deputy Foreign Minister, a delegation comprising of experts from Pakistan will also visit Tehran in the near future to discuss collaborations with officials in Iran’s agriculture sector.

Pakistan and Iran have so far shown determination to enhance economic and trade ties between private and administrative sectors of both countries, Safari added.

OPEC plus wants Iran to join supply deal

Reportedly, Iran has risen above Russia on the oil market radar due to reports from multiple sources that a new nuclear deal is very close to being agreed upon. There are also rumors that Russia is about to invade Ukraine, which has sent oil prices soaring earlier in the week, but tensions eased slightly by the weekend.

Iran is already gearing up for a return of its crude to international markets. The country last year announced production ramp-up plans. This week, media reported that officials from the state-owned National Iranian Oil Company had visited South Korea to discuss supply deals with local refiners.

If a deal is reached on Iran’s nuclear program, the country could add 500,000 bpd to global oil supply between April and May. According to Rystad Energy analyst Louise Dickson, Iran can ramp up production very quickly, in a matter of four to six months, and it also has substantial amounts of oil in storage to offer on international markets if sanctions are lifted

A potential agreement about the United States and Iran returning to the so-called nuclear deal looks close, according to an OPEC+ source.

“It is very likely OPEC will adjust Iran into the deal, as there is no other option,” the source told Reuters.

Over the past few days, there have been hints from diplomats that a deal on reviving the nuclear agreement is indeed close, which pushed oil prices lower.

Iran’s main negotiator, Ali Bagheri Kani, tweeted late on Wednesday. “After weeks of intensive talks, we are closer than ever to an agreement; nothing is agreed until everything is agreed, though. Our negotiating partners need to be realistic, avoid intransigence and heed lessons of past four years. Time for their serious decisions.”

In case a deal is reached, the United States has said that the window of reaching an agreement is closing fast—Iran could return some 1.3 million barrels per day (bpd) to the market within several months after the US lifts sanctions on its oil exports.

According to diplomats who spoke to Reuters, a draft of an agreement being discussed would put the main sanction-lifting stage, including oil exports, at a later stage, while releasing Western prisoners held in Iran and unfreezing Iranian funds would come first.

In the event of an agreement, OPEC+ would look to include Iran—currently exempted from all OPEC+ pact quotas—in the deal, Reuters’ source says.

Iran, for its part, will likely seek first to restore its oil production and exports, but it will also likely agree to a quota after talks with OPEC+, a source with knowledge of Iran’s thinking told Reuters.

It is looking increasingly likely that a new nuclear deal with Iran will be reached and sanctions on its oil industry will be lifted.

Iran would likely want to restore production to near pre-sanctions levels before joining any such agreement

 

Biden convinced Putin ready to invade Ukraine

Prior to the attack on Iraq and Afghanistan, the United States and its allies created hype about presence of Osama bin Laden in Afghanistan and Iraq building weapons of mass destruction. Both the countries were attacked, but both the mantras proved merely ‘hoax call’. This time the target is Russia and the mantra is the same, “Russia is getting ready to attack Ukraine”.

President of United States, Joe Biden on Friday said he believes Russian President Vladimir Putin has made up his mind to move forward with an invasion of Ukraine.

"As of this moment I’m convinced he’s made the decision. We have reason to believe that," Biden told reporters at the White House after delivering an update on the threat of a Russian invasion.

"You are convinced President Putin is going to invade Ukraine. Is that what you just said a few moments ago?" a reporter asked moments later.

"Yes, I did," Biden said, adding that diplomacy was still on the table if Moscow chose to deescalate.

Biden and White House officials have for weeks said they did not believe Putin had made a final decision about whether to carry out an invasion into Ukraine even as Russia amassed troops and military equipment along the Ukrainian border. But Biden indicated Friday that had changed and that the US and it allies were preparing for a Russian attack in the coming days. 

"We have reason to believe the Russian forces are planning to and intend to attack Ukraine in the coming week, in the coming days. We believe that they will target Ukraine’s capital of Kyiv, a city of 2.8 million innocent people," Biden said in prepared remarks.

"We’re calling out Russia’s plans loudly and repeatedly not because we want a conflict, but because we’re doing everything in our power to remove any reason that Russia may give to justify invading Ukraine and prevent them from moving," he added.

Biden held a call earlier Friday with leaders from Europe and Canada to discuss the ongoing threat of a Russian invasion. Vice President Harris is scheduled to meet Saturday with Ukrainian President Volodymyr Zelensky at the Munich Security Conference in Germany.

Biden and other White House officials have said it is up to Zelensky whether he wants to leave the country amid the threat of a potential Russian attack.

Despite Russian claims in recent days that it was moving forces away from Ukraine’s border, the US and NATO said that Moscow has added troops. Russia is also engaging in military exercises in Belarus, compounding the threat.   

Biden on Friday called out Russian claims he said were being used to create a pretext for an invasion. He cited the shelling of a Ukrainian kindergarten classroom by Russian-backed separatists and "fabricated claims" of an impending Ukrainian attack on Russia. 

"All of these are consistent with the playbook the Russians have used before to set up a false justification to act against Ukraine," Biden said. "This is also in line with the pretext scenarios that the United States and our allies and partners have been warning about for weeks."

Biden reiterated that he would not send US troops into Ukraine should fighting break out, but he pledged support for the Ukrainian people.

"The entire free world is united," Biden said. "Russia has a choice between war and all the suffering it will bring, or diplomacy."