KARACHI: Pakistan and Afghanistan after a long series of negotiations have signed an understanding called ‘record note’ for a revised transit trade agreement. The main or somewhat controversial feature of the accord is access for Afghanistan cargo to Wagah border from where goods will be shifted to Indian trucks. In return, Pakistan has won access via Afghanistan to the landlocked states of Central Asia.
What is interesting to note is that soon after the signing of the agreement on July 18, the government took a battering as a lot of criticism flew from all and sundry, particularly trade and industry. Though many highlighted the drawbacks of giving Afghanistan a transit trade route to the border with India, nobody took up the benefits, if any, of unfettered access to the Central Asian states.
Highlighting the opportunities coming up for trade with Central Asia, a spokesman for the Federal Board of Revenue (FBR), Asrar Rauf, said “it is a big achievement and $4-5 billion of exports can be made to these countries. However, no transit fee will be charged by Pakistan and Afghanistan on movement of goods.”
He stressed that India has not been allowed export of its products through Pakistan to Afghanistan, but this can happen if Delhi gives Islamabad access to Nepal and Bhutan through its territory.
About the security of Afghan trucks going to Wagah border, he said the government will take measures to ensure safe and secure transport of cargo, adding a tracking system will be put in place to keep a watch on the shipments and control smuggling.
Nothing significant
However, former president of the Karachi Chamber of Commerce and Industry, Anjum Nasir, brushed off the talk of advantages of trade with Central Asia. “No significant benefit can be achieved from access to the Central Asian states. Already trade is going on with these countries.”
“The agreement was done in haste and was the result of influence from the US,” he said while referring to the presence in Pakistan of US Secretary of State Hillary Clinton during deliberations with Afghanistan.
He said the major concern of the business community was smuggling under the garb of Afghan transit trade. “We have pointed out incidents of smuggling to the government and in one such case a truck left the Karachi port for Afghanistan at 10 in the morning and later at 4pm the same day the truck was standing in Karachi.”
In spite of all that, Nisar has words of praise for the FBR for the “good work” done by the board. He particularly cited plans to install a tracking system and take financial guarantees from Afghan truckers to tackle smuggling.
Incentives needed
Chairman Korangi Association of Trade and Industry, Razzak Hashim Paracha, said the government should come up with facilitation measures to enhance trade with Central Asia. Some of these incentives include opening of banks and marketing offices in the former Soviet states, which will boost business ties.
Garments, leather, medicines, surgical and sports goods are major items which can be exported to the Central Asian countries. Pakistani traders had been importing cotton from Kazakhstan in the past.
Director intelligence and investigation FBR, Zahid Khokhar, sees no immediate benefit of access to Central Asia. “When stability returns and foreign troops withdraw from Afghanistan, trade will flourish, but it is expected to take five years,” he said.
He said there is no security threat to the Afghan cargo which will be sent to India. “Our trade cargo goes to Afghanistan regularly and no shipment has come under attack.” In Khyber-Pakhtunkhwa, people harbour anti-US feelings but they are not against India.
Published in The Express Tribune, July 26th, 2010.
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