Documentation at Torkham

New rules for clearing agents have been imposed at Torkham to govern cross-border trade between Pakistan and Afghanistan. These comprise of a set of 9 conditions for export at Torkham border, and 5 conditions for imports.

The imposition of these requirements begs the question “why” at many levels. Firstly, why has it taken decades of cross border trade, smuggling, mis-invoicing and other nefarious activities for authorities to implement the simple requirement of producing a copy of CNIC and NTN of the clearing agents. When one borrows a wheelchair at a mall, the CNIC is often requested as insurance for the wheel chair. Yet this commonplace requirement, which has existed since the Customs Act of 1969, has been implemented just recently.

Secondly, why are there more conditions imposed on the export of goods rather than imports? Pakistan’s exports have been dwindling generally and to Afghanistan in particular. As per Zubair Motiwala, President of PAJCCI, Pakistan’s exports to Afghanistan have fallen from a high of $2.7 billion to $1.5 billion with India’s exports to Afghanistan via Iran taking away Pakistan’s market.

The decline has been caused by the difficulties created by the authorities for exports to Afghanistan. For example, in the last year the Torkham border was closed down 4 times at least. Increasing requirements hampers Pakistan’s declining trade at a time when India is investing in a transit trade corridor to Afghanistan through Iran. The nature of the export requirements itself are suspect. Though it was laxness on the part of custom authorities to not require CNIC and NTN copies, it serves no purpose to demand phyto-sanitary or animal quarantine certificates for commodities or animals going out of the country. If it had been a requirement imposed by the Afghan government on our exports, it would make sense.

But imposing additional requirements such as registration with respective product association that have been licensed by DGTO, Ministry of Commerce and Government of Pakistan does nothing but cause problems for the small traders in the North. As it is, half the wheat flour businesses in Peshawar have closed down while India’s wheat flour exports to Afghanistan have increased.

Lastly, if the requirements have indeed been imposed to improve the process of trade, they would have been imposed at Torkham and Chaman both. However, blocking trade at Torkham that absorbs the bulk of Afghan transit trade versus Chaman that was once termed as “smugglers’ paradise” indicates that this was a political move. Politics and business need to be segregated said Motiwala in a recent interview with BR Research. The sporadic imposition of requirements in the name of security but with the intention of “punishing” Afghanistan only creates hurdles for local traders and harms Pakistan’s economy in the long run.