Pak-Afghan trade held hostage by instability

Traders and representatives blame uncertain political and security situation.

PESHAWAR:

Although the Afghan-Pakistan Transit Trade Agreement (APTTA) signed in 2010 was dubbed a major diplomatic breakthrough at the time, it has failed to make any major improvements in bilateral trade between the two countries, especially with respect to Khyber-Pakhtunkhwa (K-P).

“In the last three years, trade between the two countries increased from $1.5 million to $2.5 million, and it has the potential to hit $10 billion if a conducive environment is provided to the business community,” Regional Secretary of the Pak-Afghan Joint Chamber of Commerce and Industries (PAJCCI) Qazi Falak Niaz told The Express Tribune.

“The security situation and failing diplomatic relations between the two countries, combined with the blockage of the Torkham Border, are the main reasons why trade is not developing.”

The PAJCCI, set up under the trade agreement, has a membership quota of only 70 traders from Peshawar. Additionally, both traders and truckers are afraid of sending their goods, according to Jan Mohammad, a trader from the walled city.

He claimed police stop their vehicles a number of times to ascertain if they are carrying illegal goods. In addition to repeated security checks, Mohammad said bad road conditions result in stalled or damaged vehicles that block the roads for hours.

“One of the important demands made by traders under the agreement relates to insurance of their cargo,” said Mohammad, adding containers stranded on either side of the border are a big challenge for continuous trade. Traders are also expected to have multiple-entry visas valid for six months or a year.

There are great opportunities for export of cement, textiles, food items, oil, furniture, construction materials, fruit and vegetables, rice, wheat and engineering goods to Afghanistan. Contractors from Pakistan can also participate in the huge amount of reconstruction work going on in Afghanistan.

Before the APPTA, Pakistan last signed an agreement to facilitate trade with its land-locked neighbour 37 years ago. This agreement was reportedly abused by unscrupulous elements to import products in excess of their demands. As a result, massive quantities of black tea, tyres, electronic goods, kitchen items, home appliances and other goods into Pakistan were smuggled.

However, Niazi claimed the new agreement has been unable to rectify the loopholes of its predecessor. “The alternative trade regime under the APTTA – which has caused issues relating to customs, transit trade, smuggling, lack of trust and lack of insurance for goods – is impacting trade,” he maintained. In order to benefit from their proximity, both countries have to work on fostering relations that encourage peace, added Niazi.

Published in The Express Tribune, April 12^th, 2013.