Afghanistan a hurdle in CARs trade deals

Worsening security situation continues to dampen trade enhancement efforts

Zafar Bhutta January 07, 2023


The Pakistan-Tajikistan transit trade agreement remains stalled, along with Pakistan’s dream to include Afghanistan in the agreement.

During the Ashraf Ghani government, Pakistan and Tajikistan struggled to include Afghanistan in a transit trade agreement. Afghanistan had refused to become part of the agreement as it insisted that India should also be included. Pakistan, however, had conveyed that this would not be possible due to diplomatic friction.

After the Taliban took over Afghanistan, hopes to include the country in transit trade deal were reignited. This, however, was short lived as the world refused to recognise the Taliban as an official government.

According to experts, another reason that has the potential to sabotage transit trade is the revival of the Tehreek-e-Taliban Pakistan (TTP).

Last month, Pakistan and Tajikistan finally signed a transit trade agreement during the Tajik President’s visit. Sources say that Pakistan offered Tajikistan access to its port in Gwadar as it is a landlocked country. This would help the Tajiks reduce reliance on the Iranian port of Bandar Abbas.

The worsening security situation in Afghanistan has also dampened Pakistan’s efforts to tap into the potential of a multi-million-dollar trade agreement with the Central Asian Republics (CARs). An official from the Commerce ministry told The Express Tribune that CARs had bilateral trade potential worth $96 billion with Pakistan.

Traditionally, Pakistan has relied on the markets in the Middle East, US and EU countries. The security situation in Afghanistan, however, remains a key challenge for Pakistan to engage the CARs in trade enhancement.

A Pakistani transport company has already contacted the Afghan authorities to allow their trucks to pass through the country. However, due to the worsening security situation, that company has been unable to use the Afghan route for its transport to CARs, officials informed.

Regarding trade relation with Tajikistan, as part of the government’s vision to make Pakistan a shipment hub and to enhance regional connectivity with Central Asia, after signing a transit trade agreement with Uzbekistan, a draft transit trade agreement was shared with Tajikistan last year.

After the approval from the prime minister, the Ministry of Commerce organised technical negotiations sessions with the Tajik side from September to December 2022.

The agreement between Tajikistan and Pakistan covers trade and transit of goods by road and rail along with customs procedures, largely on the template of the Transit Trade Agreement between Pakistan and Uzbekistan, which was a comprehensive agreement implemented in March 2022.

Officials said that Pakistan has offered facilities including the country’s seaports and CPEC, highlighting that Pakistan offers the most economical and efficient trade and transit route to CARs, including Tajikistan. In return, Tajikistan will provide Pakistani traders with access to Uzbekistan, Kyrgyzstan, Afghanistan and China to transport goods through land routes.

Published in The Express Tribune, January 7th, 2023.

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