Pakistan has proposed extension of Afghanistan Pakistan Transit Trade Agreement (APTTA) to all member countries of Economic Co-operation Organisation (ECO), official sources told Business Recorder. ECO is an organisation of 10 Muslim countries including Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkey, Turkmenistan and Uzbekistan.
Commerce Minister, Makhdoom Amin Fahim, who presently is in Kabul to attend 4th ECO meeting, has formally invited the member countries to join APTTA, which is considered a non-starter. For this purpose, Secretary Commerce, Zafar Mahmood, has already written a letter to the Secretary General ECO. "APTTA is a comprehensive document which was finalised keeping in view the best international practices. I believe that this agreement can serve as a template for other bilateral/regional transit trade agreements," said, Makhdoom Amin Fahim.
The overall bilateral trade of Pakistan with the ECO region has increased from $2284.952 million in 2005-06 to $3388.633 million in 2008-09; Pakistan's exports to the ECO countries as a whole have increased from $1130.23 million in 2006-07 to $2296.2 million in 2009-10. Intra regional trade of around $40 billion and Foreign Direct Investment (FDI) inflow of $33 billion during 2008-09 falls short of expectations considering the huge regional potential. Pakistan, Iran and Turkey have already joined the ECO Re-insurance Company.
Smuggling and illicit movement of goods across ECO countries have posed a direct threat to the economic stability and security of the region and according to Pakistan's Commerce Minister, Makhdoom Amin Fahim, there is a strong nexus between smuggling and terrorism.
According to the Minister, the ECO member countries have to address issues like smuggling and illicit movement of goods not only to protect domestic industry and revenues but also save the social fabric of the society. However, ECO's smuggling and customs offences data bank and ECO agreement on administrative assistance in custom matters are important initiatives in addressing these issues.
According to the tariff reduction modality for implementation of Economic Co-operation Organisation Trade Agreement (ECOTA), the member States are required to reduce tariffs on at least 80 per cent of the tariff lines to maximum 15 per cent over eight years with the exception of Afghanistan for which implementation period is 15 years.
The tariff lines are classified into three lists ie positive, sensitive list and negative list. The positive list consists of all goods actually traded among the contracting parties at the date of entry into force of the agreement. The negative list would cover products which shall remain outside the purview of ECOTA. The sensitive list would cover the products that are not allowed for importation in the territory of a contracting party. Pakistan believes that ECO Trade and Development Bank can play an important role in supporting the private sector in enhancing trade and investment activities.
ECO member countries have been asked to identify priority sectors where the organisation can increase its focus by providing necessary support through the Bank. Pakistan argues that e ECO Trade and Development Bank must support venture capital for young entrepreneurs so that they can realise their ideas into full-fledged business ventures.