KARACHI -- Pakistan and Iran have agreed in principal to establish a joint committee of trade experts to remove the bottlenecks and boost bilateral trade between the two brotherly countries, Muhammad Shariatmadary, the Iranian commerce minister, said Saturday.

“The proposed committee would be set up within three months,” Mr Shariatmadary said while addressing representatives of the business community at the Federation House here. The mandate of the committee would be to prepare recommendations for the enhancement of bilateral trade between Pakistan and Iran, he said.

He invited the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and the Karachi Chamber of Commerce and Industry (KCCI) to participate in this committee so that solid recommendations could be prepared and both countries may enjoy handsome trade volume.

“Both the Islamic countries have also agreed to establish a joint investment company in order to boost investment opportunities between the two countries,” the Iranian minister added. “Each country would contribute $10 million in the proposed investment company,” he said.

Iran proposed to cut the tariff by 10 percent among the countries of Economic Cooperation Organis-ation (ECO) but the business community of Pakistan and the Pakistani commerce minister have opposed this proposal, he added.

Further, Mr Shariatmadary proposed using Iranian shipping line for trade among the ECO countries. Iran has 120 ships. “Iran wants to enhance trade with Pakistan by using its shipping line... Iranian port Shahpur Jehan and Gwadar could be used for trade via sea,” he said, and added that Pakistan and Iran should facilitate each other instead of competing in bilateral trade.

The Iranian commerce minister agreed to the proposal of Pakistan to legitimate border trade. “Iran appreciates better arrangements to make border trade legitimate,” he said.

On a point raised by Riaz Ahmad Tata, president, FPCCI, that there is 50 percent customs duty and 300 percent regulatory duty on import of textile in Iran, which makes Pakistan uncompetitive, the Iranian minister said that Iran’s textile sector is old and could not compete with Pakistan. “We have protected our textile sector by imposing high customs and import duties”, he said. Also, Mr Shariatmadary informed that Iran has deregulated its tax system, adding most of the taxes have been reduced in the last three years. “Over the last three years, the customs duty on selected items to 25 percent from the earlier 170 percent.”

On the occasion, Mr Tata proposed the establishment an Iranian bank in Pakistan to enhance bilateral trade between the two countries. “Due to the absence of Iranian bank in Pakistan, the local businessmen cannot open a letter of credit for Iran,” he said, and invited Iran to open bank in export cities like Karachi, Lahore, Faisalabad and Sialkot.