Trade and Investment Forum 2020: Pakistan, Afghanistan set to find new avenues of cooperation

ISLAMABAD: Pakistan and Afghanistan are all set to find new avenues of investment and trade cooperation at a two-day Trade and Investment Forum 2020 commencing on Monday (today) in Islamabad.

The event has been organised by Speaker National Assembly Asad Qaiser in collaboration with the Ministry of Foreign Affairs and Speaker Afghan Parliament (Wolsey Jirja) Mir Rahman Rahmani who is leading a 17-member parliamentary delegation. A delegation of businessmen and investors has also reached Islamabad to participate in the forum. Well informed sources told Business Recorder that Pakistan will offer Afghanistan to join China Pakistan Economic Corridor (CPEC) and sign Preferential Trade Agreement (PTA). Prime Minister, Imran Khan is expected to address the forum. The forum, sources said, is the next step in Pakistan’s efforts to contribute to enhancing bilateral economic engagement with the help of Ministry of Commerce and the Ministry of Foreign Affairs of Pakistan. The aim is to identify sustainable solutions to the issues involved within the context of institutional and legal framework of Pakistan and Afghanistan.

Pak-Afghan trade has three distinct dimensions, transit trade, bilateral trade and informal trade. In 2019 alone the Afghan transit trade through Pakistan was valued at more than $5.6 billion. In the same period, bilateral trade touched $1.3 billion, much lower than its peak of $2.5 billion in 2011 whereas the informal trade is estimated at over $2 billion.

The sources said, Pakistani side will urge Afghanistan to take concrete measures to discourage smuggling to Pakistan being imported under APTTA as this is not only hurting its industry but affecting revenue.

Afghanistan on the hand, sources said is asking and would stress on transit facility for Indian goods to Afghanistan through land route, which is not acceptable to Islamabad.

Pakistan’s customs is of the view that the big problem with Afghanistan is smuggling which needs to be discouraged. Afghan side says that since Pakistan fenced the boarder, it is also its responsibility to take administrative measures to control illegal trade and smuggling. For this purpose, Law Enforcing Agencies (LEAs) needs to be made effective.

Pakistan customs during the first quarter of current fiscal year, seized smuggled goods worth Rs 14.38 billion as compared to seizures of Rs 8.9 billion during corresponding period of 2019.

Commerce Ministry has proposed the following measures for enhanced market access to Afghanistan and Central Asian States (CARs);(i) control of illegal trade and smuggling of foods at the borders by customs;(ii) provision of adequate banking services at Chaman, Torkham and Ghulam Khan to avoid payments through illegal channels;(iii) Preferential Trade Agreement(PTA) to ensure greater market access for products of export interest;(iv) rationalization of tariff to minimise incidence of smuggling and illegal trade;(v) expeditious operationalization of Gwadar Port and its ancillary infrastructure linking with border crossing points with Afghanistan and ;(vi) opening up of new border crossing points like Angoor Adda in South Waziristan Agency.

In the last four months, Pakistan has taken a host of measures to facilitate the Afghan transit trade through its soil. Upon receiving reports of over 11,000 Afghanistan bound containers stuck in Pakistan, the National Assembly of Pakistan took notice and mapped the issue in detail. Four parliamentary task forces under the Pakistan Afghanistan Parliamentary Friendship Group (PFG) were formed to bring relevant stakeholders together and generate recommendations on different clusters of issues. Over 20 meetings were held and number of visits were undertaken to border crossing points and ports.

The efforts bore fruit with extensive cooperation between various Ministries and institutions of the government of Pakistan. An important indication of the progress achieved was that the number of containers being cleared on border with Afghanistan rose from an average of 350 in July 2020 to over 1800 by October 2020. Now, an Afghan transit trade container from port to the border crossing point has been reduced from 28 days to 3 days only.

Pakistan has also opened Ghulam Khan, Angoor Adda and Kharlachi for bilateral trade. Necessary infrastructure is being developed at these crossing points.

It was also felt that these efforts could never be sustained without both a matching and liberal visa policy. Hence in order to encourage trade, medical tourism, educational exchanges and people to people contact, the government of Pakistan revamped its visa regime and adopted a highly liberal visa policy for Afghanistan.

For Pakistan and Afghanistan, the development of trade links acquires enhanced importance in the regional context. The potential of the CAREC and CPEC programs puts regional trade relations for both Pakistan and Afghanistan on a much larger scale. These programmes put Pakistan and Afghanistan at the centre of regional trade and present tremendous opportunities. It is imperative to maximise the use of these prospects. Improvement of necessary road and rail infrastructure could greatly aid these endeavours.

Copyright Business Recorder, 2020