Revamping trade ties with Kabul

Pakistan and Afghanistan are inching towards enhanced economic engagement amid fast growing political and military-to-military cooperation in recent months. Pakistan has now decided to facilitate Afghan transit trade by addressing the long-standing concerns of Afghan importers, who want the cost and the time it takes for goods to move to be reduced. Commerce Minister Khurram Dastgir Khan announced in Kabul last week that Pakistan had reduced the scanning process of Afghan transit cargo from 100 per cent to 20 per cent, and now, only some of the cargo from Afghanistan would be subjected to scanning.

In the past, Afghan traders were unhappy at the exhaustive scanning of cargo shipments at the Karachi port, complaining that this caused unnecessary delays. A representative of the Afghanistan Chamber of Commerce and Industry Khan Jan Alkozai, in an earlier interview, had stated that Afghan importers had been suffering losses worth millions of dollars in demurrage payments because of the delay in clearance of their transit goods. Pakistan’s decisions are in line with the decisions taken during the visit to Islamabad by Afghan President Ashraf Ghani in November.

Pakistan is now fully implementing the provisions of the Afghanistan-Pakistan Transit Trade Agreement (APTTA) to facilitate its landlocked neighbour. The APTTA was signed in 2010 and replaced the 1965 Afghanistan Transit Trade Agreement. Afghanistan now seems to be satisfied by Pakistan’s decision as the country’s commerce minister, Muzammil Shinwari, admitted that 80 per cent of problems of Afghan businessmen regarding transit trade have been resolved during the three-day talks with his Pakistani counterpart. Pakistan now also expects Afghanistan to address its concerns, including the removal of financial guarantees on Pakistani goods which are being charged at 110 per cent of the customs duty. Along with this, a hefty fee at the rate of $100 per 25 tonnes on goods which are in transit to Central Asia is also charged.

Moreover, Pakistan had also, since long, complained about the smuggling of transit goods into Pakistan which, traders say, has caused damage to the local industry. Pakistan also wants the finalisation of the draft on the Preferential Trade Agreement between Pakistan and Afghanistan, which is currently lying with the Afghan government for approval. Pakistan insists that the PTA would help in giving more market access to Afghan goods in the Pakistani market and would also address the issue of smuggling.

Published in The Express Tribune, April 24^th, 2015.