Pakistan denies Afghanistan trade route to India

No breakthrough on issue of smuggled goods

Pakistan on Tuesday once and for all rejected Afghanistan’s demand of opening up its eastern borders to allow the landlocked state to trade with India, dimming prospects of an early agreement on a new transit trade treaty.

Sources within the Finance Ministry said that visiting Afghan Finance Minister, Omar Zakhilwal, proposed the addition of a clause to the new Pak-Afghan transit trade agreement that could enable Kabul to renegotiate the possibility of trading with New Delhi after three to four years.

“The bone of contention is the language of the new draft agreement, as Afghanistan wants to insert a provision which would keep the door open for talks on the issue of trade with India,” explained an official of the ministry.

Furthermore, no mutually acceptable solution could be reached on the issue of curbing smuggling of Afghanistan-bound goods into Pakistan. Sources said that Afghanistan was not ready to cap its imports or levy duties on them.

Pakistan had proposed customs duties on Afghanistan-bound imports and also offered to collect them on behalf of Kabul.

It is claimed that Pakistan offered Afghanistan a relaxation on the import of some of the 30 items on the negative list in order to reach an agreement.

Pakistan’s official position on the matter was that the transit trade agreement is strictly between Islamabad and Kabul and that the issue of trade with India is a separate one.

Agreement on a new transit trade treaty is a key focus of the Afghan delegation’s two-day visit to Islamabad. Sources shared that both sides have set July 16 as the revised deadline to sign the treaty.

Both nations signed a Memorandum of Understanding (MoU) to ink a new deal by the end of 2009 under an American initiative. However, Pakistan is not ready to give in on the issue of allowing Afghanistan to trade with India due to strategic interests.

Six rounds of talks have already been held between the Joint Working Group representing stakeholders from both countries.

In a statement, Finance Minister Dr Abdul Hafeez Shaikh said that Pakistan was aware of its international commitments under the UN Convention on Transit Trade of Landlocked States and Article 5 of General Agreement on Trade and Tariff.

He declared that Pakistan recognised the rights of Afghanistan as a landlocked country and that it was committed to assisting Afghanistan in regional and international trade.

An official of the Afghanistan Embassy told The Express Tribune that even though outstanding issues could not be resolved on Tuesday, it was expected that an agreement would be reached very soon.

Published in The Express Tribune, July 7^th, 2010.