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Afghanistan-Pakistan Transit Trade

Afghanistan-Pakistan Transit Trade

Issues and Challenges

Pakistan and Afghanistan are interlinked in multidimensional areas, ranging from cultural relations to political ties and from religious bonds to trade links. The trade relations between the two countries are as old as their bilateral diplomatic relationship. As Afghanistan is a landlocked country, Pakistan has been providing transit route to Afghanistan under Article 5 of the General Agreement on Trade and Tariffs and various UN Conventions. Pakistan and Afghanistan have concluded the agreements of transit trade; first the Afghanistan Transit Trade Agreement (ATTA) of 1965, and second, the Afghanistan-Pakistan Transit Trade Agreement (APTTA) of 2010. The ATTA provided Afghanistan with the facility to use Pakistani routes and ports for its transit of goods to the international market. After the independence of Central Asian Republics (CARs) from the USSR in 1991, the Government of Pakistan realized the need for renegotiating the trade agreement with Afghanistan so as to have access to the newly-established CARs. 

According to the APTTA, Pakistan will provide land, air and sea routes to the Afghan goods and Afghanistan will provide land and air routes and facilities to Pakistan for trade with Afghanistan and its bordering Central Asian states and Iran. Both the countries have, time and again, have shown serious concerns on the loopholes in the agreement; businessmen and stakeholders from both sides have consistently been pointing fingers at each other for injustices and burdensome tax regimes. Following are some valuable information regarding APTTA and the issues related to it:

There are three border crossing points on the Durand Line, i.e. Torkham, Chaman-Spin Boldak and Ghulam Khan, as identified in APTTA. Afghanistan is allowed access to three Pakistani ports, i.e. Port Qasim, Gwadar Port and Port of Karachi, while Afghan goods could be transported to India through Wagah Border and to China by Tash Kuram Border Point.

During the past several years, the Afghanistan Chamber of Commerce and Industries (ACCI) has accused Pakistan for not allowing Afghan vehicles and trade convoys to reach to Gwadar port, and alleges that most of the Pakistani vehicles are used for transit trade, which, according to them, is against the APTTA. Annually, about 360,000 Pakistani trucks enter Afghanistan as against an annual entry of 8000 Afghan vehicles. Due to this huge gap, Afghan businessmen say they lose millions to Pakistan. Nevertheless, according to Article 9 of the APTTA, each party is free to select means of transport for the purpose of transit of goods within the territory of the other party to the agreement. The Afghan trucks, reportedly, lacked the third party insurance, which is a necessary condition in APTTA. Afghan authorities and business community should concentrate on removing this flaw in order to bring their trucks and vehicles into an open-market competition.

The agreement also provides for a quota system for the selection of transport with respect to fair share of traffic between the two parties; hence the concerns of ACCI can be addressed through this quota system. This concern was also discussed at the third meeting of Afghanistan-Pakistan Transit Trade Coordination Authority (APTTCA) held on October 11, 2012, which accepted the guarantees of Afghan Ministry of Communications instead of bank guarantees. It has provided Afghan traders and businessmen a viable and feasible option of using their own vehicles.

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About Mairajul Hamid Nasri

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The writer is a freelance writer and columnist. He can be reached at: mairajulhamid717@yahoo.com

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