When the long-awaited Pak-Afghan Transit Trade Agreement was inked in October 2012, hopes of re-paving the old trade ties between both countries emerged once again.
Not only had the agreement been cited as an opportunity for both countries to expand and manifest a richer trade atmosphere amongst them, but was also considered a step forward in the process of re-connecting South Asia with Central Asia and the Middle East à la times of old.
But the process of re-inventing the trade dynamics between both countries has not been without its fair share of pot-holes. Abetted by the fact that finger-pointing and political tensions on both sides have often resulted in drawn daggers and delayed trade contingents, the realistic outcome of the agreement has been less than stellar in terms of tangible economic benefits gleaned by either side.
Therefore, in July, when the news that a possible tri-lateral trade agreement between Pakistan, Afghanistan and Tajikistan was in the works first began to hit media outlets, the reaction was decidedly mixed.
With hollow promises of projects such as the IP pipelines meant to salvage Pakistan like a Fairy god-mother still ringing in the ears of most Pakistanis, there was, and is, little optimism. However, with sources confirming to Business Recorder that an agreement drawn along the lines of the current APTTA has been drafted in consultation with the relevant stakeholders, things are seemingly coming to a head.
Separated by Afghanistans narrow Wakhan panhandle, Tajikistans Gorno-Badakhshan province is a stones throwaway from both KPK and Gilgit Baltistan. And given that a tri-lateral trade agreement will ensure that road linkages in the Wakhan corridor are established, Pakistan is likely to benefit a great deal as a consequence of the excellent Pak-Tajik political relations.
Currently, Tajikistans principle trading sources remain Russia (32.3 percent of imports) and Netherlands (36.7 percent of exports) but the dynamic could soon change if the agreement goes through unhindered.
Consequently, Dushanbes imports from Pakistan -which as of now are limited to textiles, RMGs and leather goods- could expand to include other offerings such as food items, beverages, agricultural commodities and heavy machinery and equipment. Likewise, lower tariffs could mean a reduced import bill for Pakistan which can bring in offerings such as plastic, steel, and aluminum at a lower rate.
Moreover, an agreement will also propel forward the meandering negotiations for the CASA-1000 project which will see Kyrgyzstan and Tajikistan supply Pakistan and Afghanistan with 1,000MW and 300MW electricity across the trade corridor. Not only that, but in the long term, the tri-nation trade pact will likely result in improved air, road and rail linkages; thereby improving trans-regional market access and will essentially open unclog bottle-necks hindering trade between some of the neighbouring land-locked countries on the route.
Therefore, if and when the trade agreement between the three nations goes through, a new chapter in the story of historys most influential trade route will open. Not only do the prospects of a successful extension of the APTTA to Tajikistan harbinger tidings for the establishments of a North-South trade corridor, but with the Middle Eastern investors flush with the kind of capital that Asias developing economies direly need, the flow of trade and investment along this route could serve as the proverbial manna from heaven for the region.
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