Draft Preferential Trade Agreement: Pakistan, Afghanistan all set to hold talks today

ISLAMABAD: Pakistan and Afghanistan are all set to hold two-day technical negotiations on draft Preferential Trade Agreement (PTA) at Islamabad starting from Monday (today), well informed sources told Business Recorder.

Afghanistan's technical team has already landed at Islamabad on a five day (December 27-31) official visit for this purpose.

Today the Technical Negotiation Committees of both sides will discuss draft PTA, tariff reduction modalities and request lists, whereas on December 29, minutes will be finalized.

Pakistani team will comprise of officials from Ministry of Commerce, Federal Board of Revenue (FBR), Ministry of Industries and Production, Ministry of National Food Security and Research and Trade Development Authority of Pakistan (TDAP).

Last month, Prime Minister’s Advisor on Commerce and Investment, Abdul Razak Dawood visited Kabul twice to discuss prospects of PTA and a new draft Afghanistan Pakistan Transit Trade Agreement(APTTA) which will expire in February next year.

He undertook an official visit to Kabul from November 16-18 for discussion on the proposed agreements whereas on November 19, 2020, he joined the entourage of Prime Minister Imran Khan.

Pakistan and Afghanistan initiated negotiations on (PTA) during the Afghan Technical Team’s visit to Pakistan from 11-12 July, 2019, for review of Afghanistan Pakistan Transit Trade Agreement (APTTA 2010).

After Afghanistan’s entry into World Trade Organization (WTO) in 2016 and ratification of WTO’s Trade Facilitation Agreement (TFA) in 2017, both countries have observed significant changes in trade across border in the context of international as well as mutual trade and this required review of the APTTA and signing of PTA between the two countries to resolve trade issues and challenges faced by the traders of both countries.

Both countries have prepared list of goods for trade under proposed PTA. The Afghanistan list contains vegetables, fruits, liquorice, skins, hides, wool and cotton and Pakistan offers include Kino, mango, banana, sela rice sugar, fish (meat), agri medicines, fertilizers, battery chargers, electronics, etc.

Pakistan’s trade with Afghanistan for the years 2018-19 and 2019-20 is in favor of Pakistan and Pakistan’s total exports to Afghanistan are almost double it’s imports. As per Pakistan Bureau of Statistics data during the year 2018-19 Pakistan exported goods to Afghanistan worth around USD 1.3 billion and imported goods valued at around USD 540 million. Afghanistan’s total imports during the year 2018 remained at around $ 7.0 billion.

Pakistan had shared the initial draft of PTA with Afghanistan during PML(N) government and remained stuck at the office of Afghan National Security Advisor, due to influence of Indian government.

Afghanistan had also conveyed to Pakistan that it would not sign any agreement with Pakistan, unless Indian goods are allowed transport through Wagha border. Pakistan, however, refused to accept this condition, due to which no progress was made on the agreement.

However, since relations between Pakistan and Afghanistan have improved, both sides are inching towards signing of bilateral as well as transit agreements.

Pakistan maintains that (i) Pakistani trucks must be allowed to move up to Tajikistan, Uzbekistan, Turkmenistan border, and Afghan Trucks and vehicles be allowed to move up-to Wagah Border and Karachi Sea Port ;(ii) Afghanistan side provides only 5 days for transit shipment to CARs to cross its territory, after which a fine of 5000 AFG is charged per container per day. The practice should be done away with immediately as there are problems enroute that cause delays beyond 5 days;(iii) time limit for Pakistani trucks and cargo crossing Afghanistan and unloading on the border of Tajikistan should be increased from 5 days to 15 days;(iii) Afghanistan needs to develop infrastructure on its side at crossing points in order to facilitate trade;(vii) border facilitations on Afghan side of Torkham border must be undertaken immediately.

Afghanistan side raised the following issues ;(i) improvement in Railways services including additions of good transports companies, under customs supervision apart from bonded carriers be considered;(ii) apart from bonded carriers and the railways, the private trucks should be allowed under customs supervision to minimize the freight of ATT;(iii) currently, there are two Afghan items on Pakistan's negative items list i.e. auto parts and cigarettes which should be removed from the negative list;(iv) customs valuations rates should be pre-notified on the bases of WTO rules;(v) the number of scanners at borders should be increased;(vi) facilitation of the movement of goods via railway lines and investment in the development of Railway line for operations of transit cargos;(vii) Chaman border must be operationalized 24/7;(viii) mechanism should be in place for ensuring prevention of illegal extortions including private parking yard ;(ix ) preference should be given to perishable goods and they must be cleared immediately upon arrival;(x) WeBOC should be fully integrated with ASYCUDA Afghanistan and full access should be given to Afghan traders ;(xi) monopoly of TPL trackers should be finished;(xii) insurance costs may be rationalized;(xiii) bonded carriers cartel must be finished and costs be rationalized and ;(xiv) Afghan trucks be allowed to carry goods upto Wahga.

Copyright Business Recorder, 2020