Pakistan has restricted fresh fruit imports from Iran by up to 90 per cent during negotiations on a Free Trade Agreement (FTA).
Iranian fruits are in demand in Pakistan, favoured for their high quality.
Exporters in Pakistan are concerned by the move, as Iran has been a growing purchaser of Pakistani produce, and they fear a backlash of similar treatment could occur.
The current Preferential Trade Agreement (PTA) – which has not yet been signed, but still honoured – has seen exports from Pakistan into Iran go up 42 per cent over the past nine months, compared with a 7 per cent increase for goods from Iran to Pakistan.
The Tribune reported that Iran’s ministry of agriculture is not happy about the trade restrictions. Further constraints on visas for Iranian’s looking to enter Pakistan have made doing business between the countries even more difficult.
To facilitate business, the two countries’ unsigned PTA will soon be discarded, and replaced with a FTA. Three rounds of negotiations have taken place so far, with slow progression, due to a lack of banking channels.
As a part of fostering trade, each country’s state bank has agreed to execute bilateral trade transactions.
Iran’s Bank Milli and Pakistan’s National Bank of Pakistan have committed to opening branches in one another’s country, but so far there’s been no sign of significant progress.
Despite the commitment, private banks in Pakistan are unwilling to provide credit for trade with Iran due to political turmoil centred on an alleged nuclear programme.
