Discussions between Islamabad and Kabul are underway for preferential trade agreement (PTA) and trade under Afghanistan-Pakistan Transit Trade Agreement (APTTA) with a focus on bringing back the share of trade to Pakistan, which was lost to Iran and India, a national daily reported on Monday.
Speaking to a media outlet, Adviser to Prime Minister on Commerce, Textile and Investment, Abdul Razak Dawood said,
In the wake of incompetence in decision-making, irrational and faulty policies on behalf of Pakistan in the past, Kabul diversified its import regime and abandoned the reliance on imports from Pakistan, which is why 50 percent country’s export share glided to Iran and India.
In 2010-11, Pakistan’s exports to Afghanistan stood at $2.6 billion, which reduced by half to $1.3 billion in 2018. During July-October 2020, the exports to Afghanistan stood at $344 million, which showed an increase of 15.6 percent year over year, compared to the exports of $287 million in the same period in 2019.
The adviser further added, “he was confident that Pakistan will win back the lost share in Afghanistan’s market as for Kabul to import from Pakistan is the most economical.”
Pakistan held two-day talks with Afghanistan, in Kabul, on November 16-18 with a focus on the finalization of the draft for APTTA, signing of PTA, free movements of goods in both countries, as well as trade issues related to port, customs, and banking.
During the recent discussions, Afghanistan asked Pakistan to allow Indian goods to pass through the Wagha border. However, Pakistan refused on the grounds that these talks were meant to discuss the trade details between Pakistan and Afghanistan and not regarding other countries.
Pakistan also informed Afghanistan of the tension between Pakistan and India stemming out of the Kashmir issue, which is another reason that Pakistan will not be open to this demand. “Then Kabul side took back its demand and talks went smoothly on PTA and APTTA,” the adviser informed.
Once the preferential trade agreement is signed, Pakistan will be able to bounce back to the export level of $2.6 billion and eventually boost it further to $5 billion in the next five years, Mr. Razak remarked. Furthermore, he added that the same agreement will also be useful in formalizing and documenting the major chunk of informal trade that is currently taking place between Pakistan and Afghanistan.
The issue of smuggling through the Pak-Afghan border was also discussed during the talks, and Razak Dawood said that in case of smuggling of goods, under the new APTTA, Pakistan will give six months’ notice to the Kabul administration.
In case no required action is taken, Pakistan will have the right to scratch down the agreement, he said. Adding that Pakistan will also have the right to place restrictions in trade under the APTTA if the smuggling of goods from Afghanistan to Pakistan continues.
During the detailing of the PTA, Kabul demanded tariff concessions primarily on products like vegetables, fruits, and dry fruits while, Islamabad sought tariff concessions on engineering goods, construction industry materials, pharmaceuticals, and chemicals, among others.
The adviser informed that PTA and APTTA talks would conclude by the end of January 2021.