Raza Khan ISLAMABAD, April 28 (INP-WealthPK): The Government of Pakistan has issued two statutory regulatory orders (SROs) for granting formal permission for barter trade with Iran and Afghanistan. The Ministry of Commerce has issued the SROs to amend the Export Policy Order (EPO-2020) and Import Policy Order (IPO-2020) which cleared the legal mechanism to formally start barter trade with the two neighbouring countries. According to these notifications, imports and exports shall be allowed under the barter trade arrangement approved by the relevant authorities of Pakistan, Iran and Afghanistan. Earlier, the Economic Coordination Committee (ECC) of the cabinet allowed the regulatory cover to barter trade arrangements by amending relevant provisions of Export Policy Order and Import Policy Order (IPO). Maria Qazi, Joint Secretary (Foreign Trade) at the Ministry of Commerce, told WealthPK that the government is taking steps to strengthen trade with regional countries. “Barter has tremendous importance to increase regional trade to overcome foreign exchange and other challenges,” the official said. She said that traders of Pakistan were facing several challenges while doing business with Iran and Afghanistan. She said traders from both neighbouring countries were also facing similar problems while trading with Pakistan. She said these problems will reduce significantly with introduction of the new legal mechanism. Pakistan and Iran signed several memorandums of understanding (MoUs) including one for barter trade during 9th session of Pakistan-Iran Joint Trade Committee at Tehran in November last year. “Relevant departments of both the countries were in contact to finalize the legal issues as well as transit and customs,” Maria Qazi informed. Pakistan signed a Preferential Trade Agreement (PTA) with Iran in 2006. Now both the countries have decided to start barter trade to overcome the challenges and enhance the volume of bilateral trade. Quetta Chamber of Commerce and Industry (QCCI) from the Pakistan side and Zahidan Chamber of Commerce and Industry (ZCCI) from Iran side would sign an MoU to establish a barter trade mechanism. As per minutes of the 9th JTC (Joint Trade Committee) regarding Barter Trade Agreement, the governments of Pakistan and Iran have undertaken to institute appropriate regulatory measures to allow trade under the barter mechanism. Moreover, both governments have committed to expanding barter trade arrangements by involving other chambers. Pakistan and Iran see huge potential in exporting rice and liquefied natural gas (LNG) under barter system. Pakistan aims to export rice to Iran while importing LNG. According to the Ministry of Commerce, Pakistan’s imports from Iran were recorded $513 million in last fiscal year. Pakistan’s exports to Iran declined over the period of time due to various challenges. Bilateral trade between Pakistan and Afghanistan crossed $1.5 billion mark during last fiscal year. However, it fell drastically during the current fiscal year due to absence of formal banking system in Afghanistan, and other problems. To overcome these challenges, Pakistan decided to allow exports of 14 items to Afghanistan in Pakistani rupees in February. Those items included fish and fish products, poultry meat and products, cement, pharmaceutical, textiles, fruits, vegetables, salt, sugar, rice, and surgical instruments. Now the government has decided to allow barter trade with Afghanistan to minimize the effects of challenges currently faced by Afghanistan.