Business

Afghanistan losing interest in trade links with Pakistan

With Iran coming to the fore, country taking back seat in regional connectivity

Peer Muhammad April 20, 2016

Pakistan-Afghanistan border PHOTO: REUTERS

ISLAMABAD: Afghan authorities appear to have lost interest in pushing forward any trade related agreements with Pakistan with the alternative route via Iran close to being finalised.

Last week, on April 11, Iran, Afghanistan and India finished negotiating the details of the trilateral transport and transit pact, meant to provide legal framework to operate trade corridors via Iran’s Chabahar port.

India-Afghanistan trade through Pakistan

This development could possibly downgrade Pakistan’s importance from being the primary facilitator of India-Afghanistan trade to a mere back-up. This means that Pakistan has potentially lost a great opportunity to build strategic trade ties with regional economies.

Officials in the Ministry of Commerce told The Express Tribune that Afghan authorities were slower in responding to the proposed bilateral and transit trade related matters and it seemed that they were least interested towards Pakistan and would rather devote their time and energy towards materialising the trilateral agreement with Iran and India.

“All this happened because Pakistan refused to include India in the Pak-Afghan transit trade agreement,” noted the official.

Afghanistan insists that India must be part of the transit trade agreement in the same way as Pakistan uses Afghan soil to reach Central Asian states.

Afghanistan, Pakistan open key economic, trade talks

The officer cited a draft agreement pertaining to the Preferential Trade Agreement (PTA) that the ministry had sent months ago. He insisted that there has been no response from the other side.

“We have learnt that they have shared the draft agreement with their security agencies for clearance, which is surprising for us,” said the official.

Moreover, the maiden meeting of the Pak-Afghan Joint Business Council (JBC) has not been held even after its establishment around five months ago to discuss issues and to devise strategies for enhancing bilateral trade.

The JBC was supposed to hold its first meeting in February 2015, but it could not take place.

Pakistan, Afghanistan to resolve visa, road permit issues

“We have again asked the Pakistan Federation of Chambers of Commerce and Industry (FPCCI) to set another date in this regard. However, the ministry has not received any response from FPCCI. The members of the JBC have already been notified from each side.”

Published in The Express Tribune, April 21^st, 2016.

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COMMENTS (63)

someone | 7 years ago | Reply I don't think Pakistani commentators paid attention to key words "Pakistan uses Afghan soil to reach Central Asian states." Imagine if Afghans have alternate to India via Iran. If that happens, Pakistan can say good bye to ease of trade with Central Asia because it would loose leverage over Afghanistan.

rohit | 7 years ago | Reply @Pushtun Voice: Pakistan needs access to central asia through afganistan and Afganistan needed access to india through pakistan. This was in no way a bilateral trade agreement.

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Patriot | 8 years ago | Reply Totally agree with the news, basically RAW is heavily involved against pakistan, block them in all respect including their bollywood movies. They are using UAE media city to propogate and develop hate among arabs by showing very often movies against pakistan. Take a strong note with UAE that India is using using UAE land and promoting the hate.

brar | 8 years ago | Reply Pakistan needs only China the CPEC is the only medicine for all ills , they have nothing to do for rest of the world.

Rahul | 8 years ago | Reply @Sunny: "Indians are making fake comments by becoming fake Afghan citizens. Check their IP addresses. These IP addresses are from Bombay, Nagpur and Delhi and other cities of India. Indians think, we are fool. Please grow up" There are several Afghans residing in these cities either for work or universities. You might also find Pune in the list.

Woz ahmed | 8 years ago | Reply @Asad: Beautiful patriotic speech, Pakistan has come a long way. What you fail to note is we have gone backwards in the last 25 years. In 1990 we were 20% richer than India per head, today they are 20% richer per head and forcast is they are going to be 40% richer by 2020. Forecasts are only forecasts, but we need to refocus, in 35 years our population will be 300 million, through poor education , health and religious leaders being anti family planning.

Woz ahmed | 8 years ago | Reply @nasser: Sorry to burst your bubble, but we produce the worst cars in the region, why do you think imports are flooding in despite ridiculous duties. Factually you said car parts are a huge export success story , Google MIT economic complexity and you will see what our real exports are. I love your optimism, but sadly am grounded in reality.

Woz ahmed | 8 years ago | Reply @Mindful visionary: You wrote my words, all 3 countries need to get along as its only the poor and hungry who suffer from these shenanigans.

Woz ahmed | 8 years ago | Reply @Farrukh: China has already sent a train on this route direct to Iran, skirting both Afghanistan and Pakistan. Also this was from Western China not Urumqui. It changes the economics of the Gwader route, but a route direct to Pakistan will be successful, at least for China for certain and hopefully Pakistan.

Bharat | 8 years ago | Reply Chabahar is going to be a big trade-hub soon. Even I am planning to visit Bamiyan via Chabahar. Afganistan will be a developed and independent economy soon after integration with India and Iran.

raj | 8 years ago | Reply Good move. Chabahar is important for India central asia trade not just India Afghanistan. With a growing Indo-iranian and Indo-afghan trade the investment will pay off in less than 4-5 years. Gwadar is in the middle of civil war ridden Balochistan and cannot offer any security to anyone.

curious2 | 8 years ago | Reply The USA determined a long time ago that trade/money is more powerful that nukes - something Pakistan has yet to figure out. Also - doors tend to swing in both directions and there will be a time when Pakistan is desperate to have Afghanistan facilitate transit to Pakistan through Afghanistan ... but Afghan's tend to have long memories and the cost maybe VERY high.

Kabuli boy | 8 years ago | Reply @Asad: USA is not going anywhere. USA and India will stay in Afghanistan for ever and that's confirmed just like USA stayed in Germany. Now move on...

gp65 | 8 years ago | Reply @Naresh: Not only that. For goods made in Chennai which is a port, Chabahar is going to be much cheaper than Wagha anyway.

gp65 | 8 years ago | Reply @Pushtun Voice: Afghanistan wants Pakistan to provide its land as a transit for its export to India just as it is willing to provide its land as a transit to Pakistan for trade with Central Asian nations. If this should not be part of negotiations with Pakistan, who should this negotiation be with. Please note, Afghanistan is not asking Pakistan to allow Indian exports to Afghanistan as part of the deal. @iLaugh: Did not sacrifice anything. Pakistan did not allow Afghanistan to use Pakistan as a transit to sell goods to India. So Afghanistan found an alternative - through Chabahar @Imran What is your basis for the claim that Chabahar is too expensive. Compared to what? Pakistan does not allow Afghanistan to export to India. SO any option is going to better than no trade with India. @tellmore: If Pakistan indeed has the influence you claim on Afghan Taliban, then who should Afghanistan blame for the recent "spring offensive"? Either that influence no longer exists or it is not being used for Afghanistan's benefit. Either way, there is no benefit for Afghanistan in accepting unreasonable and unfair terms of trade with Pakistan.

Sunny | 8 years ago | Reply Indians are making fake comments by becoming fake Afghan citizens. Check their IP addresses. These IP addresses are from Bombay, Nagpur and Delhi and other cities of India. Indians think, we are fool. Please grow up!!!

Sridhar | 8 years ago | Reply @Imran: Says who? Are you the expert? OTOH, i think Gwadar is a non-starter given the insurgency and freedom movement in Balochistan.

Sridhar | 8 years ago | Reply @joey: You think Pakistan can help Indian economy grow! India is already the fastest growing economy in the region. Pakistan is committing suicide by not trading with India. It is a strategic blunder. For the same reason, its economy is stagnating and it goes around with a begging bowl.

Asad | 8 years ago | Reply Afghanistan doesn't only have one common interest with Pakistan. As afghanistan will start developing its needs and interest will start growing. And there are many other reasons else than profits and interests for both countries to maintain healthy relations. What about afghanistan's trade with China after departure of US ?

Tyggar | 8 years ago | Reply @Asad: Pakistan is a new country not India. Did the land of Pakistan suddenly appear on earth?

Pushtun Voice | 8 years ago | Reply Don't understand why India should be included in a bilateral trade agreement between Pakistan and Afghanistan. Is Pakistan included in the trade agreement between India and Bangladesh? The Afghans are being stupid as usual. Soon the Israelis and the Saudis will unleash war on Iran and the Charbahar port will be closed.

Farrukh | 8 years ago | Reply Iran's reentry to world trade is a game changer. A new railway link between China and Iran that traverses Kazakhstan, Kyrgyzstan and Uzbekistan is opening in 6 months that will give China access to not just Chabahar port but to Turkey and onward to Europe. In this scenario Gwadar port will be relegated to a geo-military asset in the eyes of China instead of a trade access route. Therefore, Pakistan has to do whatever it takes to come out of its isolation.

Naresh | 8 years ago | Reply @Imran: Chahbahar port route is economically not feasible. In the long run it will not work out . @Baloch : Indian goods reaching Afghanistan through Chabahar will be twice as expensive than those through Wagah. . Gentlemen please note that Indian Trade via Chabahar will not be limited to Afghanistan. India will also use the Port of Chabahar for Indian Trade with Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. By using Chahbahar India will have to pay Transit Dues to both Pakistan and Afghanistan. However, for Trade to Turkmenistan India will pays only ONE TRANSIT DUES i.e. Iran , whilst for Kazakhstan and Uzbekistan India will incur TWO TRANSIT DUES i.e. Iran and Turkmenistan. Kyrgyzstan and Tajikistan have a combined Trade of about US$ 9 Billion whereas Kazakhstan, Turkmenistan and Uzbekistan have a total Trading Volume of US$ 140 Billion. In contrast for Kazakhstan Trade India will have to pay THREE SETS OF DUES. Kazakhstan has an annual Trade of about US$ 75 Billion. So Gentlemen India knows what it is doing!

someone | 8 years ago | Reply What Pakistani don't understand is that now Afghans may have edge over Pakistan. With an alternate available, now Afghans may hike prices or transit fee for Pakistani goods going to CIS nations. You can't reach them without Afghanistan. Also, now Indian goods would be more frequent in Afghan markets and from there they even might end up in Pakistan just like Indian medicines in border areas.

Kamil Chauhan | 8 years ago | Reply @Baloch: Sailing is cheaper than crawling on roads..Innovation in transit system will improve movement from ship to road and vise-versa

Asad | 8 years ago | Reply Its good you feel like that but only for your self satisfaction. Otherwise world is not blind what is the real picture of India for example rate of suicides because of poverty under the curtain of software exports is only hidden to your eyes not for rest of the world. Compare your start and Pakistan's start 16 Ordinance factories in India compared to Zero in Pakistan at the time of partition, developed state mechanism in India and from the scratch new for Pakistan. Pakistan is a new country not India. But we are a nuclear power already and also have a space program. Compare Pakistan's age, area, population, problems, development, needs etc to India's for a balanced opinion.

Mindful visionary | 8 years ago | Reply All rhetorics and jingoism. I suggest all you guys to stop chatting for a minute and think thinkfully. In the long run no country can survive if cut borders and hinder trade deals of their neighbours, and here I am reading stuff like "close down borders" and "meh, we dont give a crap". This shoud'nt be the politics of Pakistan nor India or Afghanistan. All we need is to join hands and think of our ever getting poor country fellows rather than closing borders for each other and pay extra tax money to long haul shippings. Think outside your hate circles please.

Humza | 8 years ago | Reply @Merwais Khan: I think it's great that all Afghan business goes through Iran because it will allow the Afghan refugees in Pakistan to move back to Afghanistan or even to Iran. I never believed there was any benefit in having a trade agreement with Afghanistan since the experience from the last almost 7 decades show that the border and trade only brings smuggling, drugs, violence and weapons from there. With the news that Afghans and Indians have increased their cross border spy work to cause trouble in Pakistan, it is actually better for Afghans to use the expensive route through Iran to India. Let them take the sea and the long way via Iran and pay more. It's win for everyone and Pakistan can now legally work to close the border with Afghanistan since they are not cutting off land locked country.

Abid | 8 years ago | Reply Who cares

SHAH | 8 years ago | Reply @wiserneighbour: OK..so be it; But for sure these so called wiserneighbors, must understand that they have always been invaded, occupied, ruled by others who kept coming from outside and ruled these so called self praising super duper wiserneighbors. OK, OK, thats enough of it;

Anuj | 8 years ago | Reply @Asad compare with us mate, you know the massive difference in the reputation of India and Pakistan. We are million miles ahead of you.

Pankaj | 8 years ago | Reply This is the second big opportunity Pakistan lost just because of its anti-India policy. First they lost IPI pipeline which now comes to India via sea route. Even if Pakistan was not going use the oil it could have made huge money just collecting the transit fee from India. And now this, If Pakistan would have listen to Afghanistan then just collecting toll tax and transit fee on Indian trucks could have made millions of dollars for Pakistan. Transit deal with Afghanistan without including India was anyways not profitable for AFG. They wants to access India market for their country's growth because of size and growth rate of India economy.

tellmore | 8 years ago | Reply This is all short lived euphoria for Afghanistan. Afghanistan will know soon that they cannot survive without the support of Pakistan. The influence Pakistan has on the strong militant groups in Afghanistan makes the the position of Pakistan unstoppable in Afghanistan. The reason is simple. There are blood relations in Pakistan of all the militant groups in Afghanistan who are well looked after by Pakistan. Unless , Pakistani interests are protected, they will not allow any Afghan govt initiative to succeed. Further, Afghanistan is depending on Pakistan, but Pakistan do not need the support of Afghanistan either in trade or in security aspects. Further, Once the Gwadar port becomes operational, doing trade with Gwadar becomes cheaper rather than through Chhabahar. Hence automatically, traders will prefer Gwadar. Finally, India cannot match the strength of China and Chhabahar cannot compete with Gwadar.

Asad | 8 years ago | Reply Afghanistan has always created problems for Pakistan since 1947. Its good they carry out trade with India through Chahbahar until they stop being a proxy to India in destabilizing Pakistan. Afghans are no where respected in the world more than Pakistan.

Rex Minor | 8 years ago | Reply @Naim Khan Pakistan should close border with Afghanistan and impose visa for afghan citizens, what ever Afghanistan imports it ends up in Pakistan, let them use Iranian port,: You sir, must be living in another continentant, this is precisely what the Government of Pakistan has been doing since it was created. Those who cross over the durand line are Nomadic Pashtun tribesmen who smuggle the valuable goods which include timber and carpets and sheep skins beside precious and semi-precious stones during the winter and return with rice and sugar and Indian tea. Afghanistan has remained a land locked country since the Brits were allowed to march in Peshawar and beyond. Pakistan military has not the ability to stop these caravans who travel right through Pakistan reaching the karachi shores. Rex Minor

nasser | 8 years ago | Reply It's not going to make any difference so why such alarming headline .Everybody knows afghan business scenario .it's nowhere near making any offer to anyone .

nasser | 8 years ago | Reply @joey: My dear...auto parts is one of the most successful industry in Pakistan and being used by major companies across the globe.where did you get this notion that Pakistan was ever interested in Indian product and that it us being imported from other countries.please comment with confidence. This us not to show that Indian products should not be used but it is so that paki6is self reliant at least in this sector

sabi | 8 years ago | Reply @Iqbal: Harassment of Afghan traders besides some other factors is the key to Afghanistan,if any, looking for second option.Btw if you have valid argument which you don't have, you need not hide your identity you are Indian showing your frustrations.

Iqbal | 8 years ago | Reply @Pakistani342: If Pakistan was that great then Afghan traders and Afghan government would have responded to Pakistani government request long time ago.. It seems Afghan government and Afghan traders did not reply back for 3+ months and still did not reply back for the second request of Pakistani government... That clearly means Afghanistan is no more interested to do business with Pakistan once and for all.. Case Closed!

Hakim Afghan | 8 years ago | Reply Pakistan is a big no for Afghan traders. Afghan traders must keep guarantee of 15,000 USD for each track passing via Karachi port. Afghan traders must pay huge fees. Afghan traders must use Pakistani trucks. Afghan traders are abused on the roads. Afghan traders are abused by border control taking bribe. Iran port is a free-zone... It costs nothing to import and export for Afghans and rail way is being created which is 10 times cheaper for Afghan traders to import/export via Karachi port. So please don't talk nonsense about Pakistan is being a cheap route... if you count all the charges and fees, Pakistan is a leech and 99% Afghan traders will avoid using Pakistan soil for importing/exporting. Most Afghan traders already signed and are ready to start using Chabahar port. Pakistani corrupt government can't use the word of landlocked nonsense game anymore. They should play fair else they are done with central Asia business for good. Soon it will be Afghanistan who won't allow Pakistani goods to pass Afghan soil to central Asia!!!

Merwais Khan | 8 years ago | Reply As an Afghan I can tell you honestly that Pakistani government abused us Afghans alot due to this Karachi port and it's a great relief to get away from Pakistan once and for all... Iran port is 500x better offer than Karachi port and 95% Afghans will gladly import/export everything from there from now on. It's just matter of time. Thank you for all the helps Pakistan but it's time to move on. It's only and only because of corrupt Pakistani politicians who damaged the business between Afghanistan and Pakistan. Afghanistan is doing business via Iran port now and Rail way via Tajekistan... So basically Pakistan is a very very back up now only because of corrupt Pakistani government who misused the port.

Amit | 8 years ago | Reply @Imran: Actually it is, most of the industrial bases of India is located in south and western Indian state. It will be more economical to use marine transportation route till chabahar port rather then to carry it from southern state all the way to Punjab border through road. Also through Pakistan there are other risk factors. Relevance of Pakistan is mostly blown out of proportion.

affan | 8 years ago | Reply Good Job now less smuggled good in name of afghan transit trade..

AFG | 8 years ago | Reply @Pakistani342 Lets make something clear afghans that live in Pashtunkhwa and northern Balochistan that is pashtun land irreversibly Afghan land. Trying to create rifts among pashtuns wont work, it will strengthen pashtun nationalism. Pakistan suffers from ethnic conflict, AFG is fighting foreign backed terrorists, so peace and stability will be short term. Little to no Pakistan nationalism except from punjab.

Vectra | 8 years ago | Reply @iLaugh: "Afghan just shot itself in the foot yet again for India. May be they want to stay where they are. A Land locked primitive country sacrificing everything for India Proxy war, gaining not much. Pak didn’t loose much as Afgh and India" Do you really think and sure that Pak hasn't lost much as Afgh and India???? If you think like that the all i can say is you guys don't need any outside enemy because you yourself are your own enemies.

Vectra | 8 years ago | Reply @Imran: "Chahbahar port route is economically not feasible. In the long run it will not work out" Please explain how?? just saying not feasible this and that for the sake of just saying don't buy yourself a logic.

AFG | 8 years ago | Reply @Afghan i agree with you 100%, @Imran being isolated makes you feel better by all means keep telling your self that, cause at the moment it Afghanistan has lost interest.

Naim Khan | 8 years ago | Reply Pakistan should close border with Afghanistan and impose visa for afghan citizens, what ever Afghanistan imports it ends up in Pakistan, let them use Iranian port, as a patriotic Pakistani I suggest to our government close the borders even close the airspace for Indian air lines we only have few flights a week going to south east can fly over China.

Baloch | 8 years ago | Reply Afghanistan wants to pay little or no transit fee through Pakistan and wants to use Indian and Afghan trucks which provide no benefit to Pakistan. Pakistan wants Afghanistan to pay transit fee and use Pakistani trucks so Pakistan benefits from the trade.

Sumit | 8 years ago | Reply @Imran....hahaha chahbahar will start working this November during Modi's Iran visit,,,, now you please keep dreaming and making fool yourself

joey | 8 years ago | Reply @Imran For example. take your automobile industry. In the pretext of protecting your local industry you blocked imports of auto parts from India. But all you do is import knocked parts from Thailand, Japan at higher costs only because you don't want to help Indian economy grow. If a weaker economy like Pakistan can afford that, what can a stronger one like India can afford. Moreover, Chahbahar alsoa provides India a strategic point near the strait of Hormuz.

Pakistani342 | 8 years ago | Reply Pakistan can thrive without Afghanistan: a. Just imagine if the flow of drugs shifts from Pakistan to Iran because the logistics, people-to-people ties are greater there. b. Just imagine if Pakistan can expel the Afghan refugees c. It may just remove the straw that might break Pakistan's back. . If you compare the past 5 to the previous past 5 years: 1. The trend is arguable positive in Pakistan -- security has had a marked improvement 2. The trend is without a doubt negative for Afghanistan -- people now talk to state collapse . Correlation is not causation, however one cannot ignore that the trends in Pakistan and Afghanistan [as long as they are hostile to each other] are inversely correlated. . Go ahead and prosper work with Iran -- hope you get a better deal -- but please get out of Pakistan. I think that is more than an equitable swap.

Baloch | 8 years ago | Reply Indian goods reaching Afghanistan through Chabahar will be twice as expensive than those through Wagah.

Naveed | 8 years ago | Reply Sad....this was bound to happen..

Anon | 8 years ago | Reply OMG..now what will happen to Pakistan's strategic location importance?

Amir | 8 years ago | Reply Pakistan is busy building military might for war, but forgetting the new IN is economic war. Pakistan have lost a major revenue generating source by sinking their heads in the sand. Fools we are,

sabi | 8 years ago | Reply Look! Business is business you can't force or dictate or expect favours . It has its own natural rules. If rules of business favour the conditions even enemy will do trade with you. If you think Chahbahar is more feasible rout for Afghanistan you can't do anything nor you should do it. Wait and see which route wins the trophy in the long run.Nothing to worry about believe it.

iLaugh | 8 years ago | Reply Afghan just shot itself in the foot yet again for India. May be they want to stay where they are. A Land locked primitive country sacrificing everything for India Proxy war, gaining not much. Pak didn't loose much as Afgh and India. Iran has increased its rent & price of corridor it provided India after she became close friend with U.S. Afgh can't stop Russia from trade with Pak.

Imran | 8 years ago | Reply Chahbahar port route is economically not feasible. In the long run it will not work out

Afghan | 8 years ago | Reply Pakistan in more interested in keeping the pot of war burning in Afghanistan.

SK | 8 years ago | Reply Repeatedly I have been saying that Pakistan should adopt practical approach to make their economy stronger by aligning with India, a much stronger & economically powerful country. They should work in the same spirit as India-China relations. China is having strong political leadership but Pakistan's foreign policy is dictated by Army with very narrow vision of their own internal control. With Afghanistan's refusal to continue with Pakistan in any further engagement excluding India would push Pakistan in a very embarrassing & limited role.

wiserneighbour | 8 years ago | Reply Pakistan is happy to be a second fiddle of China.They are not bothered about other nations around them.It is clearly visible from their"strategic asset" foreign policy and refusal of entry for Indian cargoes. In the long run ,wait and watch the complete isolation of this country.

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