Govt seeks to revive trade deal with China, Central Asia

Economic corridor to prove instrumental in forging vital links

Peer Muhammad February 12, 2016
Economic corridor to prove instrumental in forging vital links. PHOTO: FILE

ISLAMABAD: In the face of slow progress by Kabul on the Pakistan-Afghanistan-Tajikistan trilateral transit trade agreement, Pakistan wants to revive a trade accord with China, Kyrgyzstan and Kazakhstan to reach markets of Central Asian countries.

Commerce Minister Khurram Dastgir said this in a meeting of the National Assembly Standing Committee on Commerce on Thursday.

The four-nation agreement was signed back in 1995 and it came into force in May 2004 allowing goods transport to Central Asia via China.

Dastgir said transit trade and bilateral trade with Kabul were at a standstill, though Pakistan had handed over a policy draft in this regard to Afghan President Ashraf Ghani.

“There is no headway as far as trilateral transit trade is concerned and we have planned to tap another avenue to reach Central Asia without banking on Afghanistan,” he said.

This way, Pakistan will be able to access markets of Central Asian states via China and the China-Pakistan Economic Corridor will prove instrumental in forging such vital links.

“This will resolve the connectivity issue until signing of the agreement with Afghanistan,” remarked Dastgir.

The minister revealed that Pakistan had handed over the draft of preferential trade agreement and transit trade agreement to the Afghan president, who reportedly shared the document with his national security adviser.

“We are still waiting for a positive response from them,” he said. “We feel that Afghanistan wants to include India in the agreement, but it seems difficult at this stage.”

According to Dastgir, Afghanistan can trade with India through Karachi and through railway from Lahore, but it is demanding road access for its trucks through the Wagah border. This could not be allowed until issues were settled between Pakistan and India, he said.

Speaking about prospects of trade with Iran after the lifting of international sanctions, the minister said the government was planning to sign a free trade agreement (FTA) with Tehran rather than relying on the already signed preferential trade accord.

“We have designed a template of the FTA with Iran with the facilities that we usually offer to other countries,” he said.

However, he pointed out that the restrictions on banking channels were still in place, a major challenge that hampers the immediate start of bilateral trade. He expected the curbs to be lifted by June this year.

He was of the view that Iran had an unpredictable trade regime as it frequently imposed regulatory duties on imports. Major exports from Pakistan are rice and agricultural products, but the Iranian food ministry often stops consignments for issuing a no-objection certificate to the importers.

The government is sending a delegation, headed by the minister of national food security and research, to Iran to discuss the export of food items and holding of an exhibition of Pakistani products. A team of SBP will also go there to finalise a payment mechanism.

Published in The Express Tribune, February 12th, 2016.

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