Economic corridor: Transit treaty imperative to protect national interest

Bilateral agreement is necessary for Pakistan, China to provide legal framework to facilitate traffic

KARACHI:

The recent visit of the Chinese president to Pakistan during which China committed $46 billion for the development of the China-Pakistan Economic Corridor has created optimism within the country about the much-awaited infrastructure investment that would link China with the Gwadar seaport.

The economic corridor is in fact a transit corridor that would connect the western region of China with the Gwadar Port in Balochistan through a 3,000km road and railway link. This is part of the strategic vision of China to enhance its access to the global market through the Indian Ocean.

At present, China’s link with Europe, Africa and the United States, which contributes largely towards global trade, is through the Strait of Malacca in the South China Sea. China is concerned that any blockade of the Strait of Malacca could undermine its reach to the global market.

Therefore the development of trade corridor through Pakistan would provide an alternative route for Chinese trade to reach the global markets of Middle East, Africa, Europe and the US. Additionally, this will also enable it to secure vital oil imports which mainly originate from the Middle East.

No transit treaty

The Strait of Malacca is a narrow strip of water connecting the Pacific Ocean with the Indian Ocean in the South China Sea. It passes between Malaysia and Sumatra island of Indonesia and is one of the busiest sea channels in the world with approximately 100,000 vessels passing through every year.

At present, there is no bilateral treaty between Pakistan and China to regulate the traffic in transit through their respective territories. The commitment made by China to develop the infrastructure in Pakistan for transit corridor without seeking guarantees of transit rights from Pakistan through a bilateral transit treaty shows confidence on part of the Chinese administration in the Pakistani authorities.

A bilateral transit treaty is therefore necessary for both sides to provide legal framework to facilitate traffic in transit passing through their respective territories. The transit treaty has three elements, the first is entry-exit points, the second is the route which will be followed during the transit journey and the third is the regulatory framework that would facilitate traffic in transit and ensure that transit goods are not diverted for domestic consumption.

The available models of bilateral transit treaties in operation between various countries globally are based on the concept of full reciprocity which means that whatever restriction or concessions agreed are applicable to all the parties of the treaty.

Pakistan has already agreed on the route that would be used by China for transit. The proposed transit corridor will enter Pakistan from Khunjerab and will use the current Karakoram Highway which is now being upgraded and will connect with Islamabad-Peshawar motorway for onward journey to Gwadar though Punjab and Sindh.

Pakistan should also offer China a parallel route to Karakoram Highway through Chitral. This would provide an alternative path to the highway since that is vulnerable to environmental and natural disasters due to its terrain and ecology. The development of this route will also connect Chitral with the mainland especially during the winter season when Lowari Pass becomes inaccessible due to snow.

Similar routes in China

Pakistan also needs to identify the similar routes in the territory of China that would be available to the private sector of Pakistan to connect with the markets of countries neighbouring China.

Pakistan should leverage this opportunity to seek transit rights from China for access to Central Asian States which includes Tajikistan, Kyrghyzstan and Kazakhstan. This would help Pakistan bypass the turbulent territory of Afghanistan for access to Central Asian markets.

One of the important routes to consider would be from Tashkurgan to Tajikistan through Pamir Range. China has recently invested immensely to upgrade this connectivity.

Pakistan’s desire to connect with the Central Asian States through Wakhan Corridor which is a narrow strip of a 14km territory of Afghanistan separating Pakistan with Tajikistan have not been very successful because of the reluctance of Afghanistan to provide access to Pakistan through this route.

Afghanistan fears that it would lose leverage over Pakistan in case access is provided through this route. Afghanistan wants Pakistan to use Torkham and Chaman customs border stations for transit through its territory for access to Central Asia.

Pakistan’s experience in managing traffic in transit has not been to the expectation of domestic stakeholders. Pakistan has been providing transit rights to Afghanistan for access to the seaports in Karachi and Port Qasim. There have been numerous complaints of diversion of transit goods in the domestic market that not only cause injury to the domestic industry but also undermine the revenue efforts of the government.

Therefore, it is crucial that while negotiating a transit treaty with China, it is important that Pakistan should devise a mechanism to ensure that there are no pilferages or leakage of the Chinese goods in the domestic market during the course of their transit through the territory of Pakistan.

The writer is a policy expert with over 20 years of experience in the public and development sectors 

Published in The Express Tribune, June 1^st,  2015.

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