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ISLAMABAD: Pakistan and Afghanistan are likely to finalise Preferential Trade Agreement (PTA) during the visit of Pakistani delegation led by Commerce Secretary, Capt Khurram Agha (retired), well-informed sources told Business Recorder.

Pakistani delegation is visiting Kabul after recent meetings of US Ambassador to Pakistan and UK High Commissioner with the leadership of Commerce Ministry.

According to sources, negotiations on revised Afghanistan Pakistan Transit Trade Agreement (APTTA) 2021 could not be finalized due to change of government in Afghanistan. The main sticking points are demand of Afghanistan side to allow import from India through Wagah, refusal to agree to quantitative restrictions or bans to curb smuggling and refusal to agree to use the word Border Crossing Point in the agreement.

Importance of Pak-Afghan private sector collaboration underscored

Pakistan is bound by international obligations, including United Nations convention of Land Locked states 1965 and United Nations convention on Law of Sea 1992 for provision of passage to land locked states.

Afghanistan, being a land-locked country, was also entitled for passage of transit cargo. Besides this passage through Afghanistan was also meant to facilitate trade and transit to and from the doubly land locked central Asian states. Historically, Pakistan had always provided access to Afghan transit cargo.

The sources said Pakistan delegation is likely to consider removing 10 per cent processing fee, which is very high and is in violation of Trade Facilitation Agreement of WTO and APTTA. Pakistan may also consider putting quantitative restrictions in the case.

In the meeting held on February 21, 2024, the Afghanistan side stated that the measures taken by Pakistan last year to change rules and regulations of Afghan Transit Trade resulted into losses by Afghan traders and many of them have left the trading business or diverted to Iranian route for transit of their goods. They urged Pakistan side to revert to the ATT rules and regulations prior to imposition of restrictions in October 2023.

Pakistan side, sources said, clarified that the measures were taken to protect Pakistani businesses and economy from misuse of ATT facility/return of ATT Cargo to Pakistan and not to harm the Afghanistan people or economy. It was also clarified that the misuse of ATT and smuggling into Pakistan of ATT items had reached such a level that imposition of restrictions became a compulsion for Pakistan.

The Afghanistan side requested removal of the condition of bank guarantee and reversion to the previous condition of revolving insurance guarantee. Pakistan side stated that Afghanistan charges cash guarantee @ 110% on the transit goods of Pakistan to Central Asian Republics while Pakistan charges bank guarantee @ 100% from ATT goods.

The Afghanistan side clarified that their custom tariffs are very low as compared to Pakistan however, they are ready to review their condition of cash guarantee if Pakistan side also removes the condition of bank guarantee. The Afghanistan side also requested Pakistan side to reconsider imposition of ban on certain ATT items and processing fee on other items. Pakistan side clarified that the restrictions on ATT can be negotiated with Afghanistan side if it agrees to address genuine concerns of Pakistan on misuse of ATT facility. Afghanistan side stated that they are ready to address concerns of Pakistan side.

FBR has notified rules for air transit and cross stuffing of ATT, however, they will be implemented if Afghan side shows reciprocity in operationalisation of TAD.

However, Commerce Ministry stated that TAD, air transit and cross stuffing facility will be implemented as a package and not in isolation and only if Afghanistan side takes back the raise in import tariff and transit fee.

The APTTA 2010 did not cover multimodal bonded air to land transit as per article 4. However, Commerce Ministry and FBR maintained that such transit initially from Islamabad Airport would not only ease provision of urgently needed support for Afghanistan but will also generate goodwill for Pakistan in the international community.

The sources said Afghan Minister for Industry and Commerce Alhaj Noor Uddin, has invited Pakistani delegation for discussion on transit and bilateral trade including possibility of a PTA. Other members of delegation are included from Commerce Ministry, Federal Board of Revenue and Ministry of Interior.

Pakistan has already extended APTTA several times as the pact has not been finalized due to wide differences between both countries.

In October 2023, Pakistan and Afghanistan did not agree on a mechanism to resolve bank guarantee issue which is hindering bilateral trade between the two countries.

Copyright Business Recorder, 2024

Comments

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Az_Iz Mar 26, 2024 06:03am
Afghanistan can carry out trade with India thru Iran, not Pakistan.
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Mubashir Munir Mar 26, 2024 01:08pm
Afghanistan is helping terrorist activities it should not be allowed transit to India via Karachi as our own mafia uses it for smuggling It's transit route should be through Gwadar port
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Mubashir Munir Mar 26, 2024 01:11pm
Our team should not give transit access as it is causing smuggling give them transit through Gwadar port
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Mubashir Munir Mar 26, 2024 01:15pm
Pakistan is not bound by any international obligation Afghanistan is not our friend ban all import and export it is causing us immense loss why our own mafia is blackmailed us
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fact checker Mar 26, 2024 04:58pm
Pak is not signatory to 1965 treaty and for Law of the Seas, Pak has signed but is not party to the subsection which commits Pak to provide access to land locked states. Editor: bad job, misleading.
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