Firing blanks: Pak-Afghan trade agreement not meeting its potential

Businessmen say trade could have been $10b a year but hasn’t crossed $2.5b in four years

PESHAWAR: The Pak-Afghan Transit Trade Agreement (APTTA) may be in place to boost trade between the two countries, but volumes remain low and issues faced by businessmen in Khyber-Pakhtunkhwa (K-P) are yet to be mitigated.

Under the original agreement signed in October 2010, Afghanistan would make trade with Central Asian Republics (CARs) accessible to Pakistan, while the latter would help Kabul’s trade with India.

According to businessmen, trade under the agreement had the potential of $10 billion on an annual basis, but has not been able to exceed $1.2 billion to $2.5 billion over the last four years. For 2015, the bilateral trade was stipulated at $5 billion dollars.



“Since the agreement has been signed, almost 70% of trade with Afghanistan has been shifted to the Iranian port city of Bandar Abbas,” said Pakistan Afghanistan Joint Chamber of Commerce and Industry (APJCCI) Director Ziaullah Haq Sarhadi,

He added under the agreement, trade authorities from both countries were scheduled to meet every three months to resolve any issues.  “Not even a single meeting has been held,” said Sarhadi.

“The business community of K-P has strong reservations over trade under the APTTA,” said Sarhadi, adding there were several issues faced by traders. These include monopoly on bonded carriers by the Federal Board of Revenue (FBR). He added if Pakistan Railways (PR) was functional, it could reduce the monopoly.

If railways were made fully functional, not only would the monopoly of bonded carriers end, but containers could be emptied at the Peshawar dry port. He added this would help the province in the form of taxes.

Partial shipments were another issue raised by traders. Also, whenever there is a delay in the shipment of goods, the national tax number or NTN of traders is blocked, causing many problems.

Traders added there is still no Weboc system in place for Pak-Afghan transit trade despite the agreement being more than four-years-old. Weboc or Web Based One Customs is a bespoke online system whereby customs clearance becomes paperless and less time-consuming.

Traders pointed out APTTA is one of the most important treaties to have been signed by the government to improve the economic environment and establish trade relations with CARs.

“Products such as vegetables, fruits and surgical equipment have huge demand in CARs markets and we have never tapped that potential,” said one trader.

Also, the traders expressed their dismay over the delay on insurance guarantees  to them. 

Published in The Express Tribune, October 14^th, 2014.