Pakistan and Afghanistan on Wednesday inked a preferential trade agreement (PTA), aimed at reducing tariffs on different products.
At present, tariffs on agreed products stand at 60%, but both sides will slash levies up to 22% under the new agreement. It is termed a historic achievement by Afghanistan and Pakistan.
The two governments have been locked in a row over the role of Tehreek-e-Taliban Pakistan (TTP) as Islamabad alleges that Kabul refrains from taking action against the TTP, which has roots in Afghanistan. Despite tensions, Islamabad and Kabul reached a trade deal after two days of talks in the Pakistani capital.
Afghanistan's Deputy Minister of Industry and Commerce Mullah Ahmadullah Zahid and Pakistan's Commerce Secretary Javed Paul signed the agreement.
They have reached an understanding to cut tariffs in a bid to enhance bilateral trade. According to the agreement, Pakistan will reduce tariffs on four food items – grapes, pomegranates, apples and tomatoes.
Similarly, Afghanistan has agreed to slash tariffs on four commodities including mangoes, oranges, bananas and potatoes. Previously, the tariffs on these food items had been more than 60%.
This one-year agreement will come into force on August 1, 2025, under which they will reduce tariffs on additional commodities as well.
According to the signed pact, Afghanistan's Ministry of Industry and Commerce and Pakistan's Ministry of Commerce have agreed to implement an Early Harvest Programme to boost trade flows and economic cooperation between the two countries.
They have reached an understanding to provide preferential tariff concessions on a selected list of agricultural goods under the Early Harvest Programme.
Concessions will be provided by reducing tariffs and duties on products originating in respective territories and destined for the other. Afghanistan will export tomatoes, grapes, apples and pomegranates while Pakistan will ship potatoes, kinnows, bananas and mangoes.
The PTA rate, which includes customs duty and other levies, on Afghan tomatoes will be 22% with volume at 400,000 tons. Meanwhile, the levies on grapes, with a volume of 230,000 tons, apples (100,000 tons) and pomegranates (100,000 tons) will be 27%.
For Pakistani goods, the PTA duties on potatoes have been reduced up to 22% for 400,000 tons. Moreover, the duties have been slashed to 27% on kinnows (100,000 tons), bananas (230,000 tons) and mangoes (100,000 tons).
The Trade Development Authority of Pakistan will issue the Certificate of Origin whereas from the Afghan side, the Certificate of Origin will be released by the Ministry of Industry and Commerce.
Islamabad and Kabul will implement the Early Harvest Programme beginning August 1, 2025. Tariff concessions will be granted for one year from August 1, 2025 to July 31, 2026. The period may be extended upon mutual agreement. All concessions are based on reciprocity and parity.
The two countries will also constitute a PTA implementation committee to oversee the Early Harvest Programme. It will include representatives from the Customs and agricultural ministries of both countries. The committee will meet every month and will monitor, evaluate and recommend improvements in the programme.
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