Setting up the proposed common economic zone will prove to be the first step in the documentation of the economy: KCCI VP Shamsul Islam
KARACHI: Pakistan and Iran must look into the possibility of setting up duty free Common Trading Zone and an Industrial Park at Pak-Iran border in order to improve the existing meager trade volume between the two countries and effectively curb the menace of smuggling which terribly hampers the legal trade between the two brotherly countries.
This was stated by Vice President Karachi Chamber of Commerce & Industry (KCCI) Shamsul Islam Khan at a webinar here on Wednesday which was also attended by President Tehran Chamber of Commerce, Industries, Mines & Agriculture (TCCIMA) Masoud Khansari, Pakistan’s Ambassador in Iran Rahim Hayat Qureshi, Consul General of Iran in Karachi Ahmed Mohammadi, Director General of International Cooperation, Iran Customs Administration Hossein Kakhki, Deputy for International Affairs TCCIMA Hessameddin Hallaj and others.
Shamsul Islam Khan pointed out that although a Preferential Trade Agreement (PTA) exists between Pakistan and Iran while numerous Memorandum of Understandings (MoUs) have also been inked from time to time and a Free Trade Agreement was also currently being negotiated but all these agreements and the MoUs have not yielded positive results as the trade volume remains stubbornly low while the smuggling flourishes.
Hence it was really essential to bring down the exorbitant tariffs and establish duty free common economic zone and industrial park where the business communities of both countries could easily set up their business units and warehouses which, if provided, would surely give a boost to two-way trade. “Setting up the proposed common economic zone will prove to be the first step in the documentation of the economy”, he added.
He said, “It is high time that Pakistan and Iranian governments, besides looking into the possibility of implementing a paper visa regime, must also agree upon giving duty free access to numerous products and we can start from any 5 to 10 items having immense trade potential in the beginning and after seeing the impact, this list can be enhanced further by adding more items being traded between the two brotherly countries.”
Vice President KCCI stressed the need to exchange trade delegations and organize exhibitions which must be participated by the business communities of the two countries that would surely help in identifying more potential areas and open new avenues of trade cooperation by bringing the business communities closer to each other.
Identifying lack of banking channel as a major barrier, he opined that although the banking channel needs to be enabled at the earliest but unfortunately, it was suffering delays due to sanctions imposed on Iran. “Therefore, we must not wait further and instead of letting the trade suffer, the business communities should go for barter trade or some other feasible option.”
President TCCIMA Masoud Khansari, in his remarks, said that the volume of trade was not satisfactory as compared to the potential which requires attention from both sides. Although the Iranian trade delegation visited Pakistan before the outbreak of COVID-19 pandemic which proved very fruitful but trade suffered due to extraordinary situation triggered by the pandemic. “Such visits would once again resume and trade would improve as soon as the COVID pandemic is over”, he added.
He mentioned that although the two brotherly countries were keen to improve trade ties but both need to overcome high tariffs barrier and lack of banking channel while the connectivity must also be improved. Linking Chabahar Port with Gwadar Port and the Free Trade Agreement between the two countries would surely pave way for improved trade ties.
Pakistan’s Ambassador in Iran Rahim Hayat Qureshi commented that Karachi Chamber and Tehran Chamber can play a very important role in appreciating the existing trade volume which was below the desired level. “Both Chambers need to work closely and exchange trade delegations to explore trade and investment opportunities, besides tapping the unexplored sectors.”
Iranian Consul General in Karachi Ahmed Mohammadi stressed that more coordination and cooperation between the business communities was required to improve trade and investment ties which were too low as compared to the potential. “We have been enjoying excellent political, historical, traditional, cultural and brotherly relations since so many years but these were not depicting in trade volume therefore, the two sides will have to make coordinated efforts”, he added.