Iran inks deal with Pakistan as pipeline project drags

TEHRAN — The Iranian and Pakistani governments announced the signing of a bilateral trade agreement Thursday as Iran's Foreign Minister Hossein Amir-Abdollahian and a high-ranking delegation were in Islamabad on a three-day visit. 

The document, according to Iran's Fars news agency, will cover a period of five years and aims to raise the countries' annual trade volume to $5 billion, more than twice the current figure.  

The deal came in line with a foreign policy drive by Iran, which has been seeking similar long-term partnerships to revive its sanctions-hit economy. In just the past two years, Tehran has inked similar agreements with China and Russia and is pushing for one with neighboring Iraq.

The Iranian economic delegation in Islamabad and its Pakistani peers finalized another document on bilateral investment after a third meeting of their joint economic committee. And on Friday, a separate agreement was clinched on trade cooperation between the Iranian and Pakistan chambers of commerce.  

At a meeting with Pakistan's Prime Minister Shehbaz Sherif, the Iranian foreign minister discussed barter agreements and banking relations, presumably in an effort by Tehran to ease crippling curbs on its international transactions that have particularly impacted the exportation of its vital oil and petrochemical products.  

In the same meeting, Amir-Abdollahian received the Pakistani leader's official invitation to President Ebrahim Raisi to visit Islamabad. The pair met in May at the shared border to jointly inaugurate an electricity project as well as a border market.  

Raisi's potential visit will add yet another destination to his long list of state trips abroad in the hectic two-year period since he took office, with his loyalists hailing those visits as a successful tactic to avoid the Islamic Republic's isolation.

On the second day of his Pakistan visit, Amir-Abdollahian stopped in the business hub of Karachi, where he said the economies of Iran and Pakistan "complement one another," highlighting Pakistan's agricultural promise for Iran and his country's energy offers in return.  

Bumpy road

Yet energy cooperation has been on a bumpy road, most notably with the long-delayed gas transfer project dubbed the "Peace Pipeline." The deal was brought up by Amir-Abdollahian at a televised joint press conference with Pakistani Foreign Minister Bilawal Bhutto Zardari. "The Islamic Republic of Iran maintains that the pipeline will serve the mutual interests of the Iranian and Pakistani nations," Amir-Abdollahian declared.  

Delays in the completion of the project remain a thorn in the side of bilateral ties. Initially signed in 1995, the repeatedly revised pipeline agreement is meant to provide energy-thirsty Pakistan with a daily flow of 75 million cubic meters of natural gas from cash-strapped Iran. 

Tehran says it has done its part and blames the delays on Pakistan's failure to deliver on its commitments, which could cost the latter some $18 billion in fines.  

Meanwhile, Islamabad has linked the issue to sanctions from its Western ally and Iran's foe, the United States, which threatens many world nations with severe penalties should they economically engage with Tehran.