Breakthrough expected in seventh round of talks

ISLAMABAD: Discussions to give final shape to the Afghan-Pak Transit Trade Agreement (APTTA) have been initiated here on Friday. The two contentious issues of providing the landlocked neighbour access to India and dealing with the illegal entry of goods into the Pakistani market came under debate on the first day of talks.

Sources disclosed that Pakistan was trying to persuade its western neighbour to increase customs duty on certain items in order to halt misuse of the transit trade agreement. However, Afghanistan categorically rejected this demand, saying that it would not raise duties under any circumstances. Instead, it suggested that Pakistan should reduce duty on those items that were being smuggled into the local market under the guise of transit trade.

Pakistan also demanded that a quota be decided on the maximum amount of goods importable under the agreement according to the needs of the people of Afghanistan. But sources disclosed that Afghanistan refused to impose any such limit on the import of goods.

The third suggestion made by the Pakistani authorities was also discarded by the visiting delegation. As a measure to control smuggling, the Pakistani side offered to collect duty for goods imported under the agreement at the Karachi port and later deposit the amount in the Afghan government bank account. Under this proposal, the collected duty would be transferred when goods entered Afghanistan and cross border certificates were issued against them.

Afghan negotiators rejected this proposal by saying that collecting import duties in Pakistan would create more complications for both sides.

Even though the two sides disagreed on how to control the smuggling of goods into Pakistan and the provision of a trade route to India, sources revealed that both sides have agreed on most clauses of the agreement. It is expected that the agreement will be given final shape within next two days.

Furthermore, Afghanistan has conceded to one major demand from the Pakistani side. The delegation has agreed that the letter of credit for the import of duty free goods should be opened in Afghanistan rather than Pakistan.

Both sides have also agreed to allow cross border movement of vehicles used to carry goods. However, a bank guarantee will be required for vehicles coming from Afghanistan to ensure that the goods being carried are not released in the local market.

The Pakistani team is being headed by the Federal Minster for Commerce, Makhdoom Amin Fahim. Meanwhile, the Afghan Minister for Trade and Industry Anwarul Haq Ahdi is leading the visiting delegation.

It is widely believed the agreement will be signed by authorities from both sides before the scheduled visit of US Secretary of State Hillary Clinton to Islamabad next week.

Published in The Express Tribune, July 17^th, 2010.