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...sion between Pakistan and India also reflected the US desire for enhanced constructive engagement in the region. The US leadership has acknowledged the centrality of the Kashmir dispute towards normalization of relations between Pakistan and India and repeated stressed the need for a peaceful resolution. Pakistan-China Relations: Friendship with China constitutes the cornerstone of our foreign policy. In pursuance of our policy of maintaining a time-honored friendship, the President visited China more than once during the last three years. His visits had a great significance for the historical relations between the two countries, which celebrated the golden jubilee of their diplomatic relations in 2001. The visit of the Chinese Premier in May 2001 invigorated our time-tested friendship. The emphasis during the visit was on strengthening of economic ties. The two sides signed agreements covering cooperation in the fields of railways, mining, telecommunication and tourism, which involved over US$ 1 billion of Chinese investment and financing. China fully supports Pakistan’s policy of combating international terrorism. The Chinese President had sent Vice Minister of Foreign Affairs Mr. Wang Yi to Pakistan as his Special Envoy (September 2001) to express complete support of his Government for Pakistan’s principled policy to assist the international community in its fight against terrorism. Pakistan-Japan Relations: Pakistan and Japan have traditionally enjoyed close and friendly relations. Nevertheless Japan imposed economic sanctions against Pakistan following our nuclear tests in 1998. But it recognized Pakistan’s crucial role in the global anti-terrorism campaign and expressed its complete understanding of the difficult economic and domestic situation that confronted Pakistan in the aftermath of September 11 events. It lifted these sanctions in October 2001. Soon afterwards, it decided to provide US$ 300 million grant assistance to Pakistan over the next two years. It rescheduled Pakistan’s loans of Yen 64.7 billion (around $ 550 million), under the Paris Club Agreement. It contributed funds to IMF’s PRGF Trust Loan Account to help IMF accommodate Pakistan’s request for an increased PRGF package. The visit of our President in March 2002 gave an impetus to bilateral relations with Japan. Pakistan-Iran relations: The President’s two visits to Iran, first in December 1999 and the second in June 2000, to attend the 6th ECO Summit, enabled leaders of the two countries to exchange views on bilateral and regional issues and promoted mutual understanding of each other’s point of view on these subjects. Pakistan-Iran relations took a positive turn with the visit of Dr. Hassan Rouhani, Secretary, and Supreme National Security Council in April 2001. A Memorandum of Understanding on strengthening bilateral cooperation was signed at the end of the visit. With the removal of the Taliban regime after 11 September 2001, relations between the two countries improved considerably. Discussions on issues of mutual interest, especially on the changed situation in Afghanistan, were held at various occasions The Middle East: Pakistan’s relations with the countries of the Middle East remain close and cordial. There exists wide-ranging cooperation with all of them. They supported Pakistan’s principled position in the fight against international terrorism, and appreciated Pakistan’s concerns following the massing of Indian troops on our borders in January 2002. The Middle East region is a major trading partner accounting for annual exports of around US$ 1.4 billion, and is host to 1.5 million expatriate workers from Pakistan who send substantial home remittances. Relations with the Central Asian Republics: Pakistan enjoys close and cordial relations with the Central Asian Republics, which are rested in shared history, culture and traditions. Since their independence in 1992, Pakistan’s relations with these states could not flourish as desired due to divergent views an Afghanistan and Pakistan’s relations with the Taliban regime. Therefore, despite many high level visits and agreements signed, we were not able to lay down a solid foundation to intensify our economic and political relationship. However affairs are on the mend. A number of agreements have been signed with these states, covering various spheres of cooperation. The recent ones include an Extradition Treaty with Uzbekistan in addition to a Consular Agreement and an Agreement on Cooperation in Custom Administration. Two agreements with Kyrgyzstan regarding Consular Assistance and Mutual Assistance on Civil, Criminal and Family Affairs are in the offing. Defense and military cooperation agreement with Azerbaijan is in the pipeline. Agreement on avoidance of Double Taxation with Tajikistan is also being considered. A Quadrilateral Agreement including China, Kazakhstan, Kyrgyzstan and Pakistan was signed in 1995. It still awaits implementation on account of a dispute by Kazakhstan on the number of road permits and transit fee. Efforts are underway to resolve the issue. In the meantime, a Trilateral Agreement has also been formalized under the Quadrilateral Agreement provisionally between Pakistan, China and Kyrgyzstan to start trade and other related economic activity between the three countries. Economic Cooperation Organization: As one of the founding members, Pakistan attaches great importance to the ECO. It hosted a very successful 1st ECO Agriculture Ministers’ meeting in Islamabad on July 23-25, 2002. The Secretary General of ECO headed the delegation from the ECO Secretariat. Earlier, on March 2002, Pakistan also hosted the meeting of the ECO Consultancy and Engineering Company. Pakistan’s relations with European countries: Pakistan enjoys close and cordial relations with the countries of Europe in diverse fields. Meaningful trade relations have been established with a number of European countries. Substantial foreign investments in Pakistan come from European countries, which are also a source of important development assistance programmes in Pakistan. While the change of government in Pakistan in October 1999 created some difficulties with the European countries, with the passage of time there was greater appreciation of the governments’ policies and wide-ranging reform agenda. Since 11 September particularly, there has been a marked improvement in the attitude and outlook of Europe towards Pakistan. Pakistan relations with the European Union have particularly been on an upswing with an important agreement on trade concessions coming into effect and the signing of a new Cooperation Agreement South East Asia: “Look East” remained an integral part of Pakistan’s foreign policy objectives, in order to enhance economic, trade and inve...
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