Collectorate’s Yearbook issued: Customs identifies snags in Pak-Afghan trade potential

ISLAMABAD: The Customs authorities of the Federal Board of Revenue (FBR) have observed that the unpredictable and inconsistent trade environment between Pakistan and Afghanistan hindered the potential of trade expansion between the two countries.

According to the Collectorate’s Yearbook (2020-21) issued by the Collectorate of Customs (Appraisement), Peshawar, it is an undeniable fact that for centuries people of Pakistan and Afghanistan, living on opposite sides of the international border have shared language, religion, culture, and ethnicities, and trade as well. However, Pakistan-Afghanistan border trade and its management remain contentious issue in the bilateral relations of both countries.

Both neighbouring countries have had faced significant challenges in their respective socio-political, security and economic domains over the years.

The required measures to facilitate and regulate bilateral trade put on backburner in the backdrop of uncertain political relations between both the countries.

Double tax and bandits on Pak-Afghan trade route

The impediments confronting border trade benefit the informal trade by way of smuggling either through unfrequented routes or misuse of transit trade facility.

An important finding arrived from the analysis of border trade is that the unpredictable and inconsistent trade environment hindered the potential of trade expansion as both countries have yet to enter into a comprehensive bilateral trade agreement to facilitate regular trade.

Another important observation is that the infrastructure and ICT-related facility at all borders stations/crossings are still short of modern standards.

The Afghanistan Pakistan Transit Trade (APTTA), 2010 does not cover aspects of investment and services costs for the transit trade cargo, which is incurred on Pakistan.

More so, vehicular movement related all-encompassing regulatory laws are much needed to be ensured for smooth cross border movement of vehicles.

Due to long term war on terror, volatile law and order situation and sectarian issues, no significant development projects were launched, and trade activity worked on customary practices at Customs. The infrastructural under-development hindered the smooth running of bilateral trade activity between Pakistan and Afghanistan.

Due to these challenging odds, the WeBOC could not be rolled out as per planned timelines in the KP. All import/export clearances were made through One-Customs clearance system.

As envisioned in various international commitments such as CPEC, CAREC etc and government’s recent initiative, “Silk Route Reconnect Policy” the trade from land border stations may turn out to be game changer only not for Pakistan but for the whole region, if the issues like border management, security constraints, extortions and slow clearance of good can be addressed.

In this context, a new development is underway whereby negotiations are being held for entering into a new transit agreement with Afghanistan after the recent expiry of APPTA, 2010.

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Simultaneously, the government is vigorously pursuing bilateral transit agreement with the Central Asian Republics (CARs) namely Uzbekistan etc.

In this environment, a great opportunity is now available to both the countries to formalise a comprehensive trade agreement covering both transit and bilateral matters for better trade management, predictable tax administration and comparative advantageous preferential trade regulations. The new trade agreement between Afghanistan and Pakistan will open a gateway of opportunities to boost trade not only with Afghanistan but also with the CARs.

It is expected that conclusion of comprehensive new trade agreement with Afghanistan will prove to be a linchpin agreement for the success of other transit agreement with the CARs, report said.

In conclusion, it is recommended that the Ministry of Commerce may accelerate efforts in joint coordination with other stakeholders including concerned ministries/departments for an early inking of a comprehensive and integrated trade agreement with Afghanistan, so that immense trade potential between both the countries and the CARs can be translated to realities, Collector of Customs Peshawar added.

Copyright Business Recorder, 2021