ISLAMABAD: Ministry of Commerce (MoC) has reportedly issued instructions to Federal Board of Revenue (FBR) for unhindered facilitation of Afghanistan destined consignments under Afghanistan Pakistan Transit Trade Agreement (APTTA) as the Federal Cabinet has approved a three-month extension in the pact, well informed sources in FBR told Business Recorder.

The formal transit pact between Pakistan and Afghanistan expired on February 11, 2021 but both sides have not yet agreed on the new draft of the agreement, due to some "unreasonable" demands by the other side.

Sharing the details, sources said, APTTA is a ten-year agreement, signed on October 28 2010 in Kabul, which came into effect one month after exchange of instruments of ratification on February 12, 2011.

APTTA stipulates three things: (i) allowing Pakistan access to Central Asian Republics; (ii) allowing Afghanistan access to Pakistan's sea ports: Karachi Port, Port Qasim and Gwadar Port and; (iii) allowing Afghanistan access to Wagah for its exports to India.

The sources said, during the last ten years, 832,819 containers of Afghan Transit Trade, carrying goods worth $33 billion have passed through Pakistan, as per data compiled by Directorate General of Transit Trade, FBR. It is estimated that 30 percent of ATT passes through Pakistan and remaining through Iran, Uzbekistan and Tajikistan.

For revision of APTTA, two meetings have been held, 7th meeting of Afghanistan Pakistan Transit Trade Coordination Authority (APTTCA) in Kabul on 16-17 November 2020 and 8th APTTCA meeting in Islamabad, from 28-30th December 2020.

During 8th APTTCA meeting, it was discussed by both sides that text of APTTA 2010 will be revised and updated, incorporating text of proposed amendments, additions and suggestions for deleting redundant articles if any. The text was discussed article by article and it was agreed to continue negotiations for finalising the new agreement. Subsequently, Commerce Minister of Afghanistan has requested through a letter dated January 20, 2021 that APTTA 2010 be enforced until new agreement is finalised and signed.

The sources maintained that the Commerce Ministry has already sought legal opinion from Ministry of Law & Justice on the modalities of extension of APTTA 2010, which has advised that if the two Governments intend to extend the tenure of the agreement, they may do so by signing an additional protocol to the agreement.

Recently, on the side-lines of the trilateral meetings on trans Afghan railway and first meeting of Pakistan-Uzbekistan Joint Working Group on trade and economic affairs at Tashkent (31 Jan-3rd February 2021), meeting was held with Afghanistan delegation, in which both sides agreed to extend APTTA 2010 by three months.

After the meeting, Commerce Minister of Afghanistan sent a letter on February 4, 2021 seeking extension of three months in APTTA, beyond February 11, 2021. Accordingly in light of the advice of the Ministry of Law & Justice, draft protocol for three months extension was prepared and shared with the Cabinet on February 9, 2021, which accorded approval of the proposal of Commerce Ministry duly cleared by the Prime Minister as Minister in Charge of Commerce Ministry.

The Ministry in its summary to the Cabinet sought extension of APTTA 2010, for three months, beyond February 11, 2021, through a mutually agreed Additional Protocol.

MoC further stated that as the signing of Additional Protocol may take some time, it may be allowed to issue directions to Federal Board of Revenue, to allow unhindered facilitation to Afghan transit goods to pass through Pakistan beyond February 11, 2021 and requesting reciprocal facilitation from Afghanistan for Pakistan transit goods.

The Cabinet approved the proposal of extension in APTTA for three months, starting from Feb 12, 2021 along with the request of Commerce Ministry that it should be authorised to issue instructions to the FBR to facilitate Afghanistan destined transit trade goods without waiting for the circulation of Cabinet minutes.

Copyright Business Recorder, 2021

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