Revised transit trade deal remains elusive

As Pakistan and Afghanistan fail to sign a revised transit trade agreement, the former has granted another extension to continue the reciprocal trade arrangement between the two neighbouring countries.

The transit trade agreement expired on February 11, 2021. Though Pakistan has made efforts to ink a revised deal, any agreement between the two sides has so far remained elusive.

Many experts point to the influence of India and the United States for the lack of consensus on the trade deal.

Pakistan wanted to include the Central Asian state of Tajikistan in the transit trade arrangement, while on the other hand, the previous government in Afghanistan sought to make India part of the deal.

As Pakistan and India have tense relations for decades, Islamabad has refused to embrace Delhi in transit trade.

Now, Pakistan and Afghanistan are hoping that they will be able to agree on a revised deal following the change in Kabul administration.

Earlier, Pakistan extended the transit trade agreement till May 11, 2022. Now, another extension has been given till the signing of a revised Afghanistan-Pakistan Transit Trade Agreement (APTTA).

In a recent meeting of the cabinet, the Commerce Division pointed out that APTTA 2010 was a 10-year agreement, which expired on February 11, 2021.

It was extended initially for three months and subsequently for six more months. Later, the two governments extended it by another six months after signing an additional protocol.

Following the change of government in Afghanistan, Pakistan’s cabinet approved a proposal of the Ministry of Commerce that called for continuing to facilitate Afghan transit trade through Pakistan till May 11, 2022.

It also sought reciprocal facilitation from Afghanistan for Pakistan’s transit goods and trucks, passing through the Afghan territory and going to the Central Asian Republics and beyond, before signing the APTTA 2021.

Negotiations on the APTTA 2021 have almost ended but an agreement is yet to be signed.

The Ministry of Commerce, after approval of the cabinet, has finalised modalities for the movement of trucks with the Temporary Admission Document between the territories of the two countries.

Afghanistan has been facilitating Pakistan’s exports to Central Asian states, through its territory, on a reciprocal basis. It is extremely important for smooth implementation of a transit trade pact between Uzbekistan and Pakistan, signed in July 2021, under the policy of enhancing regional connectivity and trade with Central Asia.

Pakistan is bound under international obligations regarding landlocked countries including the United Nations Convention on the Law of the Sea 1982. These international obligations call for providing passage to the goods of landlocked countries.

Afghanistan, being a landlocked country, is also entitled to take benefit of this facility.

Historically, Pakistan has always provided the transit cargo facility to Afghanistan. Before the APTTA 2010, access had been given under the ATTA 1965.

In view of the current situation and to continue efforts for regional connectivity, the cabinet’s approval was solicited for the proposals prepared by the Ministry of Commerce.

The ministry said that it may be allowed to issue directives to the Federal Board of Revenue (FBR) for providing unhindered facilitation to Afghan transit goods and trucks and allow them to pass through/ to Pakistan’s designated seaports/ airports and land territory beyond May 11, 2022 until the signing of APTTA 2021.

It also sought approval for requesting reciprocal facilitation from Afghanistan for Pakistan’s transit goods and trucks, taking export goods/ bringing import goods, while passing through Afghan territory, to and from the Central Asian Republics and beyond, as per modalities agreed with Kabul.

The cabinet considered a summary titled “Continuation of Facilitation for Afghan Transit Trade under Afghanistan-Pakistan Transit Trade Agreement 2010 till Signing of Revised APTTA”, submitted by the Commerce Division, and approved the proposal.

Published in The Express Tribune, May 20^th, 2022.

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