People associated with the Afghan transit trade are worried about the likely impact on their businesses of allowing Afghan trucks to carry the proposed Wagah-Khyber transit trade items, as well as existing Afghan imports, via Karachi ports.
In an open letter to the government, Chaman and Quetta Chambers of Commerce and Industry, as well as representatives of the Chaman Customs Clearing and Forwarding Agents Association, Afghan Trade Transport Association, Transit Trade Truck Owners Union, and All Chaman Labour Association Railway and NLC Yard, have urged the government not to give Afghan trucks access to the Wagah border as well as Karachi ports.
Doing so, they warn, would create serious economic problems for the local people, who are attached with Afghan transit trade. The issue deserves serious attention. Although, Pakistan and Afghanistan signed a memorandum of understanding at a high profile trilateral meeting in Washington last May, it is yet to be turned into an agreement. That may take a while, considering that Pakistan is unwilling to allow the new activity while bilateral trade with India, as well as the Composite Dialogue peace process remains suspended.
Nonetheless, although our government has kept denying that the MoU had anything to do with India, details appearing here and there, have indicated that Indian transporters are to carry Afghan transit trade goods up to the Wagah border, from where they would be picked up by Afghan trucks. The local truckers are rightly unhappy that they, along with the NLC and Pakistan Railways, will have no role in the activity.
The government must ensure that if and when the trade starts, it does not harm the local transporters' business interests in any way. Like Indian transporters taking care of their segment of the route, Pakistani transporters should carry the goods to the two designated border points at Torkham and Chaman.
Necessary steps must also be taken to prevent smuggling. ATTA is already a major source of smuggling into Pakistan. It causes huge revenue losses to the economy, adversely impacting local businesses. The National Assembly's Standing Committee on Finance was told last month that the ATTA accounts for 75 percent of an estimated $5 billion worth of smuggled goods entering Pakistan annually. Many of the items imported under ATTA, are not even meant for the Afghan market.
For example, the Afghans prefer to drink green tea and not its black variety, yet large quantities of black tea are imported for eventual smuggling into Pakistan. An FBR official told the Standing Committee that following an increase in the valuation of stainless steel in the recent past, steel imports under the ATTA doubled during the July-December period in the current fiscal year, as compared with the previous year.
The imports also include a large variety of electronic equipment, cosmetics and other items that are turned back from the border to be sold in Pakistani markets, at the cost of the local businesses. Islamabad has been trying to deal with these problems by placing a ban on the import of certain items, and through a common customs duty proposal - so far without success. The Quetta and Chaman business people have given a timely warning of similar issues cropping up, if and when the Wagah-Khyber trade route opens up; the government must also remain prepared to address them in a timely fashion.