Agree to implement transit trade accord: Official

ISLAMABAD: Afghanistan and Pakistan have agreed to enforce a long-awaited transit trade deal that would help war-ravaged Afghanistan boost its economy, Pakistani government official said on Saturday.

The announcement came during a visit by Afghan President Hamid Karzai to Islamabad, where he met civilian and military leaders in a bid to secure Islamabad's support for his government's reconciliation efforts with Taliban.

The U.S. sponsored trade agreement was signed in October 2010 but could not be enforced after the two countries failed to sort out differences over bank guarantees for Afghan goods.

The United States is keen to try to wean Afghanistan off billions of dollars in foreign aid by boosting economic growth.

Pakistan's Federal Bureau of Revenue secretary, Salman Siddiqui, said the accord was going to be implemented from Sunday."We will start acting on this agreement from June 12," he told Reuters.Pakistan has long expressed its concern over smuggling into Pakistan of goods being imported by Afghanistan.

To ensure the consignments reach Afghanistan and not smuggled back to Pakistan, Pakistan sought bank guarantees from Afghan importers.

A senior Pakistan commerce ministry official said all issues had been resolved. "There is no hindrance to its implementation," he said.

Nearly 34 percent of Afghanistan's imported goods are transported through Pakistan, with the rest coming via Iran and Tajikistan.

COPYRIGHT REUTERS, 2011