ATTA: keeping an eye on negotiations

The quantity of shaving blades imported into Afghanistan - if consumed - equals to every woman, child and man shaving thrice a day. Every vehicle in Afghanistan would need to change a new tyre to utilize all yearly imports. And, 25 million Afghanis would have the highest per capita consumption of tea in the world to consume 100,000 tonnes of black tea.
In contrast, Pakistan with a population and higher per capita income than its western neighbour imports 80,000 tonnes of black tea a year. The above listed stark facts reflect the misuse of Afghan Transit Trade. The result of this smuggling is not only a serious loss of revenue to the Pakistani government but also results in the loss of jobs and curtailment of businesses. Besides tea, tyres and tubes and razor blades; electronic goods and plastics (polypropylene and polyethylene granules) are the other two affected sectors in the economy.
According to the State Bank, Pakistans exports to Afghanistan in the last 11 months (July 09 to May 2010) were $1.073 billion and imports a mere $ 3 million. The major contributors in Pakisans exports are wheat flour (atta), sugar and other food stuffs besides oil and POL products, cement and construction material.
The smuggling chain involves the warlords in Afghanistan as well as influential politicians in Khyber-Pakhtunkhwa and Balochistan (backed by local sardars and warlords) and conniving customs authorities at the sea ports as well those manning the exit points along the 800-kilometre Pak-Afghan border.
The coalition on war against terror comprising of United States of America, Britain and Pakistan needs to reflect on how the existing Afghan transit treaty is being misused to buy arms and ammunitions to fund the Taliban on both sides of the border, instead of pressurizing Pakistan to conclude the treaty without a common import tariff as well as collection of duty at Karachi.
Pakistani businesses need not worry about opening cross-border trade with India. If the local manufacturers can compete with Chinese imports under the present liberal import disposition - they can also compete within Pakistan against imported Indian goods.
Giving India the permission to export to Afghanistan and Central Asia needs to be linked with opening the Indian market for not only Pakistan goods but also for imports to India via Pakistani ports. This would require opening Wagah in Punjab, Munabao in Sindh and access between Muzaffarabad and Srinagar. Policymakers should be clear about the quid pro quo in negotiations with both the neighbours.