Tyre industry urges govt to set up joint commission on ATT

KARACHI: As the Afghanistan Pakistan Transit Trade Agreement (APTTA) 2010 has been extended for three months, the local tyre industry has urged the government to establish a Pak-Afghan joint commission on Afghan Transit Trade (ATT).

Although both countries have already exchanged drafts for the revision of the APTTA, which is yet to be finalized, there is a need to analyze Afghanistan’s actual annual consumption of goods keeping in mind its population, standard of living, and other relevant economic indicators.

“This will also facilitate the Afghan government to import some items which are not in the prohibited items or negative list as defined in the agreement, but unfortunately, the channel was badly misused,” said Chief Executive General Tyre Hussain Kuli Khan.

He said that the ATT Agreement signed in 1965 had many loopholes, and it was a known fact that the bulk of smuggling took place through this mechanism.

“For example, tyres are imported to Afghanistan via Karachi, but they never make it there and find their way back to Pakistan through illegal means.

A large quantity finds its way back into the country, flooding the markets in the major urban centers of the country with the goods imported under the ATT,” he added.

He urged the Federal Board of Revenue (FBR) to make sure no tyres without documents are sold in the market. “We appreciate that FBR has taken some actions against the smugglers, but it has to be a sustained effort, and the FBR needs to be more vigilant and should raid the markets and seize the tyres having no valid documentary proof of legal imports,” he added.

With the development of the auto sector in Pakistan, new possibilities are also emerging for the tyre industry; however, a significant obstacle to the local tyre industry is smuggling, said Hussain.

“Local tyre industry needs a level playing field. In any country’s economic development, the local industry’s role is crucial as it’s like a country’s backbone. The government must support the local tyre industry,” said Hussain.

He added that the local tyre industry would be geared up to meet the ever-rising demand for tyres in Pakistan, but this is dependent on how the government can ensure that smuggling is curbed.

The government should know that rampant smuggling under the guise of ATT is restricting the local tyre industry to pour more investments in the manufacturing facilities, said Hussain.

The annual consumption of tyres in the country is around 10 million, excluding TBR and motorcycle tyres. The local tyre industry contributes to 18%-20% of the country’s demand while imports are accountable for 15%, and the rest is undocumented or smuggled tyres.

Hussain Kuli Khan said that if a level playing field is provided, the local industry could meet all local requirements.

Copyright Business Recorder, 2021