Pakistan has recently cleared a legal mechanism to provide barter trade with Iran and Afghanistan as the former is under US sanctions and the latter’s bank’s reserves have been frozen by the US.
Pakistan’s Dawn News reported on Friday that the decision was taken by the Economic Coordination Committee (ECC) of the cabinet in a meeting chaired by Pakistan’s Finance Minister Shaukat Tarin.
According to an official statement, Dawn reported, the meeting took up a commerce ministry’s summary for ‘grant of regulatory support for establishing barter trade arrangements with Afghanistan and Iran’ and, after discussions, “allowed regulatory cover to barter trade arrangements by amending relevant provisions of Export Policy Order (EPO) 2020 and Import Policy Order (IPO) 2020.”
While Iran has been under US sanctions for many years due to its nuclear program which has made difficult its trade with other countries, the disruption in Afghanistan’s banking system following its central bank’s reserve frozen abroad has hampered its trade with the regional countries, especially Pakistan.
According to Dawn News, trade between Iran and Pakistan stagnated due to the sanctions which led the chambers of commerce of the two countries to sign an agreement last November for a barter trade mechanism. Now Pakistan wants to apply the same mechanism with Afghanistan to boost trade between the two countries.