Pakistan and Iran's trade cooperation rubbed America the wrong way

Turning a blind eye to the US's low-key warning to Pakistan about its trade agreements with Iran, both Iran and Pakistan sealed the deal with multiple agreements and MOUs, emphasizing the need for a strong partnership, tackling shared security issues, and boosting economic collaboration.

The first visit to Pakistan by Iranian President Ebrahim Raisi comes at a time when tensions are rising in the Middle East and the knot between "Israel" and Iran is at its thickest. Raisi's visit reflects the intricate dynamics between Iran, "Israel", and the ongoing Gaza situation, symbolizing efforts to forge ties with the neighboring country amidst regional tensions.

The current regional context gives the Iranian President's visit significant diplomatic importance. During the visit, the leaders of Iran and Pakistan discussed issues relating to mutual trade, border tensions, and energy ties, as well as regional issues including the Iran-"Israel" tangle and its broader implications for South and West Asia.

Joint Communique

Both sides assessed how regional tensions have increased as a result of the ongoing conflict between "Israel" and Gaza. Regarding the Palestinian issue, both hold the same opinions. Iran and Pakistan agree when they say that they oppose attempts by "Israel" to vilify and discriminate against the Palestinian people. There have been tens of thousands of fatalities, massive destruction, and a humanitarian crisis as a result of "Israel's" war on Gaza. Tehran and Islamabad did not acknowledge "Israel" and had no connections to the Zionist leadership.

At the end of the Iranian President's visit, Pakistan's Foreign Office released a joint statement on Wednesday stating that both countries decided to improve mutual interaction through the frequent exchange of high-level visits to fortify fraternal relations.

They denounced the continuous aggression and atrocities committed by the "Israeli dictatorship against the Palestinian people, particularly the cruel blockade of Gaza that has caused millions of Palestinians to be displaced and has caused extensive death and damage. They called for an unconditional and immediate ceasefire, unrestricted humanitarian aid to the besieged population of Gaza, the return of the Palestinians who had been displaced, and responsibility for the crimes done by the "Israeli regime. They reaffirmed their support for a fair, all-encompassing, and long-lasting solution founded on the goals of the Palestinian people.

Referring to the mutual border as the "boundary of peace and friendship," both sides emphasized the importance of regular cooperation and viewpoint sharing between Pakistan's and Iran's political, military, and security authorities. To transform the Pakistan-Iran border from a "border of peace" to a "border of prosperity," Iran and Pakistan agreed to boost bilateral trade to $10 billion over the following five years. Additionally, they emphasized the need for energy cooperation, with a focus on the IP Gas Pipeline Project, power transmission lines, and trading of electricity. As participants in the Economic Cooperation Organization (ECO) and the Belt and Road Initiative (BRI), the two nations promised to enhance infrastructure, connectivity, and energy cooperation.

They agreed that the Shanghai Cooperation Organization (SCO) was a crucial platform for the stability and prosperity of the area, opening up new opportunities for connectivity, transit trade, and the economy. The close and cordial cooperation between the two nations in all SCO processes pleased both sides. Additionally, they emphasized how crucial it is that the SCO-Afghanistan Contact Group reconvene quickly to coordinate stability and economic growth.

Agreements/MOUs signed

During the Iranian President's 3-day visit from April 22 to 24, Iran and Pakistan signed eight agreements and Memorandums of Understanding (MoUs) for cooperation in various fields, including security, civil judicial assistance, and veterinary and animal health. President Raisi flew back to Iran on Wednesday morning.

The two countries signed an MoU for the establishment of a special economic zone (SEZ), while another was signed for film exchanges and cooperation between the information ministry and Iran's Organization of Cinema and Audiovisual Affairs. MoUs were also signed between the Ministry of Overseas Pakistanis and Iran's labor ministry, as well as between the Pakistan Standards and Quality Control Authority and its Iranian counterpart.

The two countries signed an MoU for the establishment of a special economic zone (SEZ), and another for film exchanges and cooperation between the information ministry and Iran's Organization of Cinema and Audiovisual Affairs. The Ministry of Overseas Pakistanis and Iran's labor ministry also signed MoUs, as did the Pakistan Standards and Quality Control Authority and its Iranian counterpart.

Iran's role lauded

On his part, the Pakistani premier underlined the need to cooperate to end the Israeli crimes in Gaza as soon as possible.

"Pakistan and Iran are concerned about the situation of the people of Gaza and condemn the crimes of the Zionist regime," Sharif said. "We call on all the countries in the world to cooperate to end the crimes in Gaza as soon as possible," he added.

Sharif made it clear that "a fair and detailed solution to the Palestinian issue is necessary," stressing that Pakistan will not place conditions on its support for Palestine. He stated that Islamabad would persist in collaborating with Tehran on the issue until the formation of a Palestinian state with al-Quds as its capital.

During an interview with the Islamic Republic News Agency (IRNA), Pakistani Federal Minister for Housing and Works Riaz Hussain Pirzada praised Iran's unwavering position against "Israeli agendas, considering Iran a shining light in the Islamic world. He emphasized that President Raisi's visit sent a clear signal to the common foes Iran and Pakistan face.

Pirzada let loose on Western countries and pro-Israeli factions, calling them out for their two-faced approach to human rights and dealings with independent nations. He put forth the idea of a regional alliance that would bring together Iran, Pakistan, Saudi Arabia, and Turkey to strengthen their common interests and tackle the challenges they face together.

The US threatened Pakistan

As Raisi continues his make-or-break three-day visit to Pakistan, Islamabad has received a subtle caution from Washington about its increasing proximity with Tehran, dropping hints about a "possible risk of sanctions."

Given the two nations sealing the deal, the US State Department spokesperson on Tuesday said: "We caution anyone thinking about doing business with Iran to keep an eye out for the potential sanctions."

Without holding back, the spokesperson warned Islamabad to avoid business deals with Tehran and subsequently encouraged it to strengthen its trade and economic ties with Washington. The spokesperson stated that Pakistan relies heavily on the US as one of its major trading partners.

"We have also been at the forefront of investing in Pakistan for the past 20 years. The spokesperson emphasized the importance of economic relations between both countries, saying that Pakistan's economic success is a breeze for both of us and we are eager to continue our partnership.

On the flip side, given Islamabad's tight bond with Tehran during President Raisi's three-day visit and the inked agreements between the two nations, the spokesperson dropped a hint that these relations might be hanging by a thread due to the looming risk of sanctions owing to Iran's global standing.

The State Department's statement coincides with a pivotal moment in Pakistan's history, as it simultaneously aims to strengthen its "brotherly ties" with Iran and extend support to their president, following their cross-border conflicts in January. Iran's regional actions and recent conflicts with "Israel" over its attack on its embassy in Damascus, make the statement especially significant in light of Iran's stature on the international scene.

What did Washington want from Pakistan? 

The US State Department hinted about the "sword of Damocles hanging over their heads" in light of the business deals between Pakistan and Iran. This warning raises red flags about Pakistan cozying up to Iran, which currently poses a challenge to the US's hegemonic world order.

Washington made it crystal clear that it was in the interest of Islamabad to refrain from entering into any trade deals with Iran, suggesting that Pakistan's economic success benefits both countries and the US is eager to continue this partnership.

The US's warning also underscores the need to tread carefully in regional politics and maintain stability. They think that Pakistan's agreements with Iran have the potential to cause significant disruptions, particularly given Iran's dominant role in global and Middle Eastern affairs. The US likely seeks to monitor regional developments and ensure that Iran does not undermine its diplomatic ties with Pakistan.

The US State Department statement serves as a warning about the potential economic and diplomatic repercussions of establishing too close ties with a country under US sanctions. Pakistan has not yet responded to these threats, and it will be interesting to see how Islamabad reacts and dares to maintain close friendly relations with its neighbor Iran despite US pressure.