Pak-Afghan trade deal signed

Pakistan and Afghanistan signed a long-awaited amended transit trade agreement on Sunday, which the United States hopes will help boost cooperation between the neighbours and open more Afghan trade routes to India.

Minister for Commerce Amin Fahim and his Afghan counterpart Anwarul Haq signed the pact in Islamabad during a visit by US Secretary of State Hillary Clinton.

“Bringing Islamabad and Kabul together has been a goal of this administration from the beginning. This is a vivid demonstration of the two countries coming closer together,” Richard Holbrooke, the US special envoy for Afghanistan and Pakistan, said after the signing ceremony.

The pact, which has to be ratified by the parliaments of both countries, marks an effort to resolve Afghan demands to use Afghan trucks to transport exports to India via Pakistan by the sensitive Wagah border.

Pakistan will not permit Indian exports to Afghanistan through the Wagah border, al though both sides agreed to discuss this further. According to an official privy to the talks, India will be allowed to offload its goods for Afghanistan at Wahga border from where Afghan trucks will carry them to Afghanistan.

US officials said the final deal was reached in part after the Pakistani military signed off on the transit plan despite persistent fears of weapons smuggling.

More exports would help President Hamid Karzai counter a Taliban insurgency by improving economic conditions, which is also an important goal for Washington as it looks ahead to President Barack Obama’s July 2011 target date to begin withdrawing US troops.

Almost 50 per cent of Afghanistan’s trade is with its five neighbours Pakistan, Iran, Tajikistan, Turkmenistan and Uzbekistan. Trade between Afghanistan and Pakistan is worth more than $1 billion.

But the World Bank says trade remains very one-sided in favour of Pakistan, with Afghanistan exporting little to its more populous neighbour.

The trade deal comes ahead of an international conference in Kabul on Tuesday at which donor countries and Karzai’s government will try to chart a path forward for the conflict-torn country.

Both Afghanistan and Pakistan have agreed on the need for a new agreement to give Afghanistan sea access and provide Pakistan with direct routes to Central Asia.

US officials say the new deal will reduce average transit costs between the two countries by half, lower import costs and make exports more competitive, along with helping employment prospects on both sides of the border.

The agreement also sets up a joint chamber of commerce between the private sectors of the two countries, which US officials say will help further strengthen their tentative alliance as they seek to turn back al Qaeda-linked Taliban insurgents and modernise their economies. (Reuters with additional reporting by our correspondent)

Published in The Express Tribune, July 19^th, 2010.