Iran and Pakistan signed a revision of their previously inked preferential trade agreement to cut tariffs on some items, the Islamic Republic of Iran Broadcasting reported on Wednesday.
At the end of the two-day visit of an Iranian trade delegation to Islamabad, the two sides agreed to reduce tariffs on some of the export-bound goods from Iran to Pakistan and vice versa.
Tehran and Islamabad had inked the original preferential trade agreement on 2006.
Iran's Commercial Attaché to Pakistan Ahmad Fasihi told IRIB that the delegations also agreed to hold trade exhibitions and exclusive goods fairs in the other side.
According to Fasihi, Iran exported some $278 million worth of non-oil goods (including chemical and petrochemical products) in its last calendar year (ended March 20, 2009) to Pakistan. Limestone, machine-made carpet, scrap iron, tar, and chemical products were the major exported items.
Meanwhile, Iran also exported some $500 million worth of oil products to Pakistan in the above-mentioned period.
On the other hand, Pakistan exported around $279 million worth of goods including mango, rice, sport gear, surgical instruments, and leather products to Iran last year.
Preferential trade agreement is a trade pact between countries that reduces tariffs for certain products to the countries who sign the agreement. While the tariffs are not necessarily eliminated, they are lower than countries not party to the agreement. It is a form of economic integration.
In recent years, Pakistan and Iran have deepened their economic partnership. In 2008, Iran and Pakistan met at the seventeenth session of their Joint Economic Commission, where Iranian foreign minister Manouchehr Mottaki claimed that Iran and Pakistan have the potential to increase their already-significant economic cooperation "far beyond the present volume of trade between them which is $500 million annually." At the meeting, both governments' representatives expressed their hope to increase their bilateral trade to $1 billion in the near future.