Removal of Regulatory Duty: Afghanistan exerting pressure on Pakistan through Europe

Afghanistan is reportedly attempting to exert pressure on Pakistan through Europe for the removal of Regulatory Duty (RD) on different items which, it argues, is hurting Afghan exports well informed sources told Business Recorder. The sources said, British High Commissioner to Afghanistan along with British High Commissioner to Pakistan held a meeting with the Minister for Commerce and Textile, Pervaiz Malik and raised the issue of Regulatory Duty imposed by Pakistan on Afghan products.
Commerce Minister reportedly explained Pakistan's position on this issue. According to sources, European Union ambassador to Afghanistan is also expected to meet Commerce Minister next week and is expected to discuss the same issue.
Secretary Foreign Affairs, sources said, had approached Prime Minister Shahid Khaqan Abbasi on the recommendation of Pakistan ambassador to Afghanistan aimed at trying to get RD removed on different items imported from Afghanistan without taking Commerce Division on board. However, Prime Minister sought the viewpoint of Commerce Division which opposed unilateral concession to Afghanistan. Prime Minister endorsed the arguments of Commerce Division and rejected the summary sent by Secretary Foreign Affairs Tehmina Janjua.
The sources said, Secretary Commerce, Younus Dagha, also snubbed Pakistan ambassador to Afghanistan, saying, "The language you have used in your letters indicates as if you represent Afghanistan not Pakistan." Commerce Ministry, sources said, has also convened another meeting on January 22, 2018 to discuss trade related issues with Afghanistan. Commerce Ministry recently held a meeting of stakeholders to discuss trade issues with Afghanistan which included Pak-Afghan Chamber of Commerce & Industries which termed imposition of RD illegitimate.
Another delegation of Pak-Afghan Chamber of Commerce & Industries (PAJCCI), led by Zubair Motiwala met Prime Minister's Advisor on Finance, Dr Miftah Ismail and apprised him of the woes of those engaged in trade with Afghanistan. "We have conveyed to Miftah Ismail that imposition of RD on Afghan goods is a cruel act and it should be removed forthwith," said, Daroo Khan one of the members of the delegation. He claimed that Prime Minister's Advisor on Finance and Prime Minister's Advisor on Revenue, Haroon Akhtar Khan assured him that they would play their due role to do away with the RD on Afghan goods.
"We would request the Prime Minister to remove RD on Afghan products as Afghanistan is exempt from RD," he quoted Haroon Akhtar Khan as saying. Chairman Pak-Afghan Chamber of Commerce & Industries Zubair Motiwala told Business Recorder that the imposition of RD on products from Afghanistan has no rationale; he added import of unpolished/uncut stones has also been stopped.
Motiwala said that 80 per cent of trade between the two countries consists of Pakistan's exports and only 20 percent comprises of Afghanistan's exports. He said Afghanistan also imposed duties and taxes on Pakistani products in retaliation due to which Pakistani exports have declined.
However, when this issue was raised with Prime Minister's Advisor on Finance, he said the financial impact of RD on Afghanistan is just USD300 million or USD350 million which can easily be waived off. In reply to a question, Zubair Motiwala said that the issues hindering transit trade and refunds of demurrage charges of 23 day blockade of Pak-Afghan border also came under discussion in meeting with Dr Miftah Ismail.
He said, the viewpoints of Ministry of Ports and Shipping and Ministry of Commerce are different on waiver of demurrages. Afghans are of the view that they are ready to buy expensive goods from sources other than Pakistan because of inconsistency in our policies. Iran's exports to Afghanistan doubled after closure of Pak-Afghan border for 23 days and imposition of Regulatory Duty. Motiwala said that Pakistan's share in Afghanistan has been slashed to USD1.1 billion from USD1.8 billion and stated that it may further decline to USD900 million.
The delegation also discussed the reasons for the delay in formal meeting of APTTCA. Afghanistan's acting Commerce Minister has refused to hold the meeting of APTTCA until India is included in the discussions. PAJCCI has recommended inclusion of Tajikistan in APTTCA instead of India. The delegation also held meetings with Afghan ambassador to Pakistan Dr Omar Zakhilwal, who maintained that trade with Pakistan should continue to flourish instead of trade with any other country.
Afghanistan's Deputy Minister for Commerce and Industries has conveyed to Pakistan that Kabul does not take into account what the ambassador to Pakistan had committed to Pakistani commerce minister, saying that there was no leniency in Afghanistan's stance on inclusion of India in APTTCA, as a precondition foor a meeting of the Authority Pakistan has already made it clear that it would neither accept India in APTTCA, nor start talks on this precondition.
Zubair Motiwala quoted Omar Zakhilwal as saying that he is ready to sit with anybody on this issue adding that both the governments should separately deal with political/security and trade matters. Zubair Motiwala suggested that if APTTCA is not possible then a meeting of Joint Economic Commission should be convened to sort out all outstanding issues.