ATTA needs to be revisited

Policy lines involving trade negotiations have always seen Pakistan playing guarded strokes in relation to Afghan Transit Trade.
Foreign Minister Qureshi and his Afghan counterpart held a joint press conference in Islamabad last week, where both agreed on the mutual benefits of an early finalization to the Afghan Transit Trade Agreement (ATTA).
Initially signed between the two neighbours on March 2, 1965, the agreement expired in September 2009. Round after round of negotiations since then have failed to materialize into a new trading regime.
Critics often cite the lack of negotiating acumen at international forum, such as the World Trade Organization, getting the better of Pakistani delegates. But if even the ATTA results in Pakistan receiving the short end of the stick, there is little hope.Just to recap, Pakistan allowed duty free access to Afghanistan on nearly all products. In return, the land locked neighbour has failed to comply with Pakistans demand: the transit right for its transporters to move into Afghanistan as well as Central Asian states to expand its export market. More recently, Pakistan allowed Afghan exports to India as well, although the new draft agreement did not carry any provision relating to grant of transit facility to India for its exports to Afghanistan.
And if that wasn enough, smuggling results in major losses for Pakistani traders that use legal channels, which in addition results in tax collection losses.
Goods are imported under the ATTA, presumably for consumption in Afghanistan. But significant quantities of these goods are smuggled back through the porous border back into Pakistani markets.
Exports to Afghanistan in the first eleven months have increased by nearly 21 percent, $1.1 billion up from $0.9 billion in the same period last year. Interestingly, imports from Afghanistan are just $3 million in the first eleven months. One has to wonder if some cross border traffickers decided to start documenting transactions since imports were down to $0.3 million in the same period last year.
Karachi Chambers of Commerce and Industry believes the loss to the national exchequer, resulting from ATTA, is around $2 billion annually. Others provide estimates up to $3 billion. But the actual loss is impossible to quantify given there is no documentation in Pakistans grey economy.
If there is one rule that policy makers need to wake up to, it is that those who don stand their ground, are walked upon by others. And that is exactly the state of affairs today.
Scrapping free trade with Afghanistan will be detrimental from a strategic point of view, given the growing influence of India in the country. However, the agreement must be negotiated favourably.
Common sense dictates that Afghanistan needs Pakistan, given its geography. Therefore, Pakistan should be able to dominate the trade agreement.
For starters, Islamabad should affix, if need be unilaterally, a deadline to finalize the modalities of the agreement in a way that are mutually beneficial. Second, if duty free transit is allowed through Pakistan, the same must be reciprocated in way of Pakistani exports to Central Asia.
Pressure from India to be allowed duty free passage to Afghanistan must not be granted within the ATTA. Such considerations should fall under the subject of Pakistan-India trade agreements.
But when the government and the parliament are mired in the fake degree controversy, they are likely to have little time for such trivialities as trade agreements.