What was supposed to be the ultimate dialogue session on Afghanistan Transit Trade Agreement (ATTA) turned out to be possibly the penultimate one. Although, no formal agreements have been reached as yet, both Pakistan and Afghanistan have wowed to meet again at the start of the new decade. But there was one vital understanding that was reached upon - which will only add to the already long list of unfavourable trade terms for Pakistan.
According to the news reports, Afghanistan will now for the first time in its trade history with Pakistan have the access to Indian markets for its exports through Pakistans land. However, the latter did not agree to the proposal of letting India use its territory for the export of Indian products to Afghanistan. There, however, still remains the fear among concerned people that the USA backed talks might propel Pakistan to soften its stance on disallowing India-Afghan exports through Pakistan.
What Pakistan failed to achieve is the agreement on getting access to the all important Central Asian Region (CAR) in reciprocity to the allowance of its own land used for Afghanistan exports to India. This one-sided benefit to Afghanistan will not only deprive Pakistan of the chance of stepping into the CAR but there are also heightened fears that this practice would lead to enhanced smuggling into Pakistani market.
Tracking back into history reveals that Pakistan has been on the receiving end ever since Pak-Afghan trade talks started back in 1965. Time and again it has offered discount on duties on Afghan governments request but all that has only resulted in more and more smuggling of the products, originally imported by Afghanistan. Pakistan did its bit to curb the smuggling in the 90s but that did not last long as it again succumbed to Afghanistans plea of short listing the negative items from the list of banned items.
The absence of official data makes it only a guess work that how much does the smuggling cost to the national exchequer in terms of duties and other charges. The Karachi Chamber of Commerce fears the costs in excess of $2 billion every year - an amount which could reduce our heavy reliance on foreign aid.
Time seems to be running out for Pakistan as the troika of India-Iran-Afghanistan seems to be on a rapid move to stretch its reach to the CAR. Iran has inaugurated a sea port at Chah Bahar exclusively for Indian and Iranian exports to CAR through Afghanistan. Bear in mind that this is not a very viable option for India because of the long route it has to take, which provides Pakistan with an opportunity to negotiate on its own terms with India and reap completive advantage of its favourable location.
Tips for the next round: Pakistan should put up a strong voice to impose strict check on smuggling and should do away with the sympathetic treatment of Afghan imports that has caused the country billions. Pakistan should also take leverage of its better logistic facilities in comparison to that of Afghanistan which is ranked 150th out of as many countries in the world. The earlier things are sorted out, the better it is for Pakistans economy.
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