ISLAMABAD: In a sign of progress towards a free trade agreement (FTA), the Iranian authorities have agreed with the initial draft shared by Pakistan and returned it with their input, paving the way for kicking off formal negotiations on streamlining commerce between the two sides.
Pakistan had shared the draft on Iran President Hasan Rouhani’s desire for free trade between the two countries during his visit to Islamabad in March this year.
Both the sides agreed to switch from the current preferential trade agreement to an FTA and push bilateral trade volume up to $5 billion over the next five years.
Furthermore Pakistan and Iran signed a Memorandum of Understanding (MoU) agreeing in principle to open channels in their respective central banks for bilateral trade transactions.
Absence of banking channel between the two countries was the key hurdle in payment mechanism for bilateral trade after lifting of sanctions by the international community.