Some Suggestions to Improve Transit Trade

 Transit Trade

Pakistan has always aspired to support the regional connectivity network and that is where Pakistan’s policy and CAREC’s programme and vision are in sync with each other. If you increase the capacity – infrastructural capacity, IT capacity, human capacity and all the things that are of import to any border terminal – the flow of cargo is going to be not only added but multiplied. We should strengthen our transport and energy infrastructure, so businesses can survive and thrive.

We are in a pressing need to complete roads, railways, and ports-related transit facilities. It will require significant inter-ministerial coordination at both federal and provincial level. Hence, strengthening coordination between trade-related governance institutions, including the Ministry of Commerce and Federal Board of Revenue, is inevitable.

Moreover, an updated assessment of the roles and perspectives of government institutions involved in the management of transit trade is required, and the de facto policy and practice of transit trade need to be aligned with modern standards.

The rail and road linkage projects, which are currently facing delays due to fiscal constraints, should be prioritized. The inter-ministerial and inter-governmental coordination is also indispensable to improving road linkages and integrated border and customs management, besides coordination among country’s security agencies for strengthening law and order. Support from the security agencies will also be required to curb the illegal flow of persons and merchandise through other border crossings.

The federal government should work to create synergies across different connectivity commitments under APTTA, CPEC, ECOTA and QTTA. This should not remain limited to merchandise trade but should also include the creation of an enabling environment for the transit of natural resources and energy supplies. For this purpose, a joint working group of Economic Affairs Division, the Ministry of Foreign Affairs, the Ministry of Commerce, the FBR, and the State Bank of Pakistan should be constituted and it must regularly meet to see how Pakistan’s contribution towards each of these forums could be strengthened.

Read More: Afghanistan-Pakistan Transit Trade

To ensure and enhance the confidence-building measures with Afghanistan, Iran and other Central Asian countries, and to introduce the concept of “One-stop Border Post” like in Zimbabwe and South Africa, the federal government may look into the feasibility of establishing such a facility at selected border crossings. Such initiatives lead to the reduction in supply chain transaction costs and increased revenue for the federal government. Identification and elimination of redundant activities and documents, rearranging of activities and procedures to make the trade processes more efficient, prioritizing trade facilitation measures (based on quantitative time and cost data) and better understanding and cooperation among stakeholders are some important factors in this regard. Furthermore, modern border trade infrastructure such as installation and operationalization of electronically integrated scanning system, minimization of customs processing, improved en-route monitoring and multi-modal transit should be developed on a priority basis.

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