Chamber decries hurdles to trade with Kabul

Welcomes trade deal, demands long-term policy to address challenges

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KARACHI:

The Pakistan-Afghanistan Joint Chamber of Commerce and Industry (PAJCCI), led by Chairman Muhammad Zubair Motiwala, has welcomed the signing of a preferential trade agreement (PTA) between the two countries earlier this week.

Formalised by Pakistan's Commerce Secretary Jawad Paul and Afghanistan's Deputy Minister of Industry and Commerce Mullah Ahmadullah Zahid, this agreement reduces tariffs on key agricultural commodities such as Afghanistan's grapes, pomegranates, apples and tomatoes and Pakistani mangoes, oranges, bananas and potatoes from over 60% to 27%, with a special 22% rate for tomatoes and potatoes.

"PAJCCI acknowledges this progress, which builds on discussions held in a meeting of the Special Investment Facilitation Council (SIFC) on December 17, 2024. This milestone reflects our longstanding demands, pursued through consistent efforts and reinforced during the SIFC meeting, marking a significant step towards enhancing trade," the chamber said in a statement on Saturday.

Despite the encouraging step, PAJCCI President Junaid Makda remained concerned about persistent challenges hindering bilateral and transit trade, which declined from $2.5 billion at its peak to $1.2 billion in 2024.

"As outlined in our recent letter to Interior Minister Mohsin Naqvi, these issues include the lack of a consistent, long-term trade policy from the Ministry of Commerce and the State Bank of Pakistan, creating uncertainty among traders and discouraging investment," he said.

Payment disputes, driven by banking inefficiencies, have led to undue pressure from the Federal Investigation Agency (FIA) on legitimate businesses, which impacted traders' confidence. Temporary Electronic Import Form waivers, without a permanent system, complicate trade planning while delays in visa issuance for Afghan businessmen are highly discouraging, and streamlining the process could foster greater economic collaboration, the chamber said.

The Khyber-Pakhtunkhwa government's infrastructure development cess, though reduced to 1%, continues to burden transit trade, which is contrary to international commitments and diverts some trade to routes like Chahbahar, Iran.