Azerbaijan-Pakistan transit and preferential trade agreements underway: envoy

KARACHI: The Azerbaijan envoy on Friday underscored the importance of bolstering economic and business relations between the two nations by streamlining processes for the private sector.

"The private sector should be engaged in the joint working groups, the establishment of which have been agreed between the parties at the seventh session of the Azerbaijan-Pakistan Intergovernmental Joint Commission which was held on December 2021, in Baku," Khazar Farhadov, the ambassador of the Republic of Azerbaijan told businessmen at a meeting the Karachi Chamber of Commerce & Industry (KCCI).

"The joint working groups are for trade, agriculture, banking, energy, tourism, information and communication technologies, transport, youth, health, military-technical and labor fields wherein the private entities should also be invited to become part of these groups to achieve the desired level of trade and economic cooperation."

President KCCI Iftikhar Ahmed Sheikh, Vice President Tanveer Barry, Former Presidents Majyd Aziz and Junaid Makda along with KCCI Managing Committee Members attended the meeting.Ambassador Farhadov said that work was currently underway on a Transit Trade Agreement and Preferential Trade Agreement between the two countries, which would lead to improved trade ties.

He added that according to the decision of the Cabinet of Ministers of the Republic of Azerbaijan on November 22, 2022, rice imported from the Islamic Republic of Pakistan was exempted from import customs duty until December 31, 2027.

Ambassador stressed that the resumption of LNG supplies by the State Oil Company of the Republic of Azerbaijan (SOCAR) to Pakistan and the perspectives of mutual investments in respective fields, including the energy and IT, will not only contribute to the both countries’ economies, but also raise cooperation between two brotherly states to a new level.

Additionally, Farhadov said that given the easy visa obtaining condition for Pakistani citizen and AZAL (Azerbaijan Airlines) direct flights starting in 2023, more than 50,000 Pakistani citizens visited Azerbaijan in 2023 .

"The works done have great contribution to the establishment of connectivity between Azerbaijan and Pakistan, as well as people to people contacts."Underscoring the need to focus on improving linkages between the business communities of the two countries, the envoy said that participation in each other’s exhibitions and frequent visits would open up more avenues of trade cooperation by bringing people closer to each other. “Without private sector’s participation, we will never be possible to achieve what we are looking for.”

President KCCI Sheikh, while welcoming the ambassador, said that Pakistan and Azerbaijan have a long-standing historical relationship, reinforced by regular high-level interactions. The bilateral social, cultural and economic cooperation between the two countries reflects the depth and strength of these relationships.

He mentioned that in FY23, Pakistan's exports to Azerbaijan amounted to approximately $6.8 million, falling short of their potential, hence, efforts have to be made to elevate these exports to a reasonable level by eliminating trade barriers, streamlining customs procedures, improving the business environment, and assisting SMEs of both countries.

Sheikh said that Pakistan's acute energy crisis, compounded by its heavy reliance on expensive imported fuels, pose affordability challenges, hence, Azerbaijan, with its abundant energy resources, could assist Pakistan in dealing with these challenges.

“Keeping in view the agricultural potential of both countries, it's vital to explore opportunities in areas like agricultural research, advanced irrigation techniques, livestock management, seed exchange programs, disease diagnostics and risk management. This can deepen bilateral economic integration and boost agro-food trade and exports between the two countries.”

He opined that Azerbaijan’s companies can explore joint ventures and investments in SEZs under the CPEC, which can further strengthen our economic relations. The investors from Azerbaijan should capitalize on the opportunities provided by SIFC and pursue joint ventures in potential sectors such as agriculture & livestock, energy, IT & telecom, energy, industry, trade & tourism.

President KCCI stressed that both countries should explore available opportunities to expand their trade in textiles, cotton, ready-made garments, rice, chemicals, and pharmaceutical products. “We should also consider diversifying our trade and boosting exports for further economic cooperation. Establishing academic linkages between agrarian institutions may strengthen bilateral relations and economic cooperation between the two countries.”