The Economic Coordination Committee (ECC) of the federal cabinet on Thursday approved the Commerce Ministry’s proposal of granting regulatory support to establishing barter trade arrangements with Afghanistan and Iran.
The ECC meeting was held with Federal Minister for Finance and Revenue, Shaukat Tarin, in the chair in Islamabad. Federal Minister for National Food Security and Research, Syed Fakhar Imam, Federal Minister for Economic Affairs, Omar Ayub Khan, Minister of State for Information and Broadcasting, Farrukh Habib, Federal Secretaries, and other senior officers participated in the meeting.
Aimed at improving bilateral trade and transit, the proposed amendment will provide a regulatory cover to barter trade arrangements with Iran and Afghanistan.
The Governments of Pakistan and Iran have already undertaken to institute regulatory measures to allow trade under the barter mechanism. The two sides have committed to expanding barter trade arrangements by involving other chambers.
As per the Export Policy Order (EPO) 2020, exports from Pakistan are generally governed under the Foreign Exchange Regulations of the State Bank of Pakistan. As such, the existing provisions of EPO do not cater to barter trade arrangements. Hence, an amendment may be needed to align EPO with the above-referred barter trade agreement. Similarly, the Import Policy Order 2020 allows imports against all modes of payment subject to the procedure prescribed by the central bank.
In view of the above, the Commerce Ministry proposed that to provide regulatory cover to barter trade arrangements, relevant provisions of EPO 2020 and IPO 2020 may be amended by assuring that exports and imports are to be allowed under barter trade arrangements, subject to the Ministry’s approval.
It bears mentioning that in accordance with the Imports and Exports Control Act 1950, the federal government is empowered to prohibit or restrict imports into or exports from Pakistan of any commodity, and/or to “regulate generally all practices including trade practices and procedure connected to the import or export of such [a] good”.
