Afghan trade talks stalled

Pakistan has reportedly stalled trade talks with Afghanistan after the latter sought land access to Wagha border (for trade with India by road) in lieu of facilitation to the proposed transit agreement between Pakistan and Tajikistan. This was revealed by the Commerce Minister, Engineer Khurram Dastgir Khan in a chit chat with a group of media persons.
Khan visited Kabul a couple of months ago to negotiate the new transit trade agreement with Afghanistan, besides seeking facilitation for transit trade agreement with Tajikistan. Afghanistan is still under some influence of the remnants of a pro-Indian lobby, dating from Karzai's administration, who have a reasonable say in official affairs of Afghanistan, Dastigir contended.
He said Pakistan wants Afghanistan to facilitate Pakistani trucks destined for Tajikistan by removing duties and tonnage fee as Tajik people are keen to import Pakistani vegeetables, fruits and sugar etc In reply to a question he said Pakistan has already offered transit trade agreements to Central Asian states as well as utilisation of Pakistani ports especially Gwadar.
"I told the Afghan side that transit trade agreement between Pakistan and Tajikistan is almost final which has been prepared on the pattern of our agreement with Afghanistan and requested Kabul to facilitate it but the latter set the condition that until Pakistan grants land access to Afghan trucks to Wagha (India), they will not facilitate Pakistan for transit trade agreement with Tajikistan," he added.
According to the Commerce Minister, Afghanistan may have thought that as Pakistan is extraordinarily keen to reach Central Asian States, it would accept Afghanistan's proposal of land access to Wagha but Islamabad conveyed in plain words that this was not the case. "Keeping in view the attitude of the Afghan side, we postponed transit trade talks with Afghanistan that were due in May 2015 and I conveyed at the highest level not to please make our bilateral relationship conditional on grant of access to a third country," the Minister added.
Answering another question, Commerce Minister claimed that he conveyed to the Afghan authorities not to even mention the name of India with him. "I clearly conveyed to the Afghans that their proposal was off the table," he maintained. Commerce Ministry made hectic efforts to facilitate Afghanistan and for this purpose Commerce Ministry convinced the Federal Board of Revenue (FBR) to reduce inspection of Afghanistan destined shipments from 100 per cent to 20 per cent. Pakistan also gave access to Afghan trucks to Wagha and Karachi and also promised that from June 2015 Afghan containers will also be transported through Pakistan Railways. "I delayed my trip to Afghanistan with the intention that we must have something in the basket for Afghanistan. But unfortunately, Kabul did not reciprocate," he continued. The Commerce Minister suggested that both countries should resolve their issues including trade issues through their political leadership.
According to a study conducted by Pakistan Business Council (PBC), the share of Afghan transit trade through Pakistan in the 5 years prior to the implementation of the new Afghanistan Pakistan Transit Agreement (APTTA) in 2011 ranged from a low of 19 per cent in 2008 to a high of 60 per cent in 2010 (the last year prior to the implementation of the new transit agreement).
The study shows that the bulk of Afghanistan's transit imports are still routed through Pakistan. The overall volume of Afghanistan imports have progressively decreased in the last few years, most probably as a result of a slowdown in the Afghan economy. Reported exports to Afghanistan by countries which do not share a border with Afghanistan increased from $2 billion in 2006 to a high of $7.9 billion in 2011 (APTTA was implemented in June 2011) falling to $4.3 billion in 2014.
Post implementation of the new APTTA in 2011 there was initially a significant drop in Afghan transit through Pakistan, though 2010, the year prior to implementation of APTTA, had seen a significant jump of more than 113 per cent over 2009 reflecting a possible pre-empting of Afghan importers prior to APTTA. Reported exports to Afghanistan by countries which do not have borders with Afghanistan have fallen from a high of $7.9 billion in 20111 to $4.3 billion in 2014. There has however been an increase in Afghan transit trade through Pakistan rising from 22 per cent in 2011 to 58 per cent in 2014, clearly showing Pakistan's importance as a conduit for Afghanistan's imports.
There appears to be a discrepancy of about $1 billion in 2014 between the imports through APTTA reported by Pakistan's customs and the figures reported by Afghanistan. In 2014, there was a discrepancy of about $1 billion in figures for the transit trade as reported by Pakistan and Afghanistan. Pakistan reported transit trade of $2.15 billion while Afghan customs reported transit imports through Pakistan at $1.2 billion. In 2010, the last year of the old APTTA, this discrepancy was $2.9 billion.