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ISLAMABAD, June 24: Pakistan has lost its share in Afghan transit trade as volume of import in terms of containers declined by more than 50 per cent in the last couple of years after stringent conditions were introduced in the new Afghan transit treaty.

The new transit treaty has been operational since June 13, 2011, and is believed to have caused diversion of transit trade to Iran and India, as both countries have developed infrastructure in and around the Iranian ports of Chabahar and Bandar Abbas to facilitate the diverted trade.

The flow of commercial containers was 60,338 containers in 2010-11, a year before the revised treaty implementation. The number fell to 29,321 after the implementation. Official statistics showed that flow of commercial containers fell to 21,184 in July-March period of 2012-13.

“This is a significant decline in the import of containers under the Afghan transit trade,” an official of the commerce ministry commented.

The decline in imports of containers in the transit trade may also deprive Islamabad from the leverage, which it has been enjoyed for decades to assert pressure on Kabul.

The emergence of the new two routes for Afghan cargo would also enable Kabul to reduce reliance on Pakistan for trade with the rest of the world.

A customs official familiar with these developments told Dawn that including stringent clauses in the treaty were unlikely to help curb smuggling.

“Now containers imported through Iranian ports are smuggled to Pakistan through the same routes,” he said.

The only difference, the official added, was that earlier a huge number of Pakistanis were getting jobs directly or indirectly, and now they were transferred to Iran. He said: “The smuggling can only be discouraged through reducing duties on smuggling-prone items and effective surveillance of the border.”

There is a negative perception about transit trade in Pakistan, which tends to ignore its contribution to diverse economic activities, from clearing and shipping services to unloading, trucking, transportation and other allied services, to the workforce that is engaged in the entire operation, and the movement of cargo containers upcountry.

The government has revised the treaty, but reluctant to reduce duties on smuggling-prone items as well as improve anti-smuggling measures and surveillance. The drop in Afghan-bound cargo has in no way impacted smuggling, as Bara markets across the country are thriving, the official said.

This significant decline in transit cargo is attributed to major factors, like revised transit trade agreement, insufficient infrastructure, additional taxation/extortion, poor law and order situation, and high freight charges.

Afghan importers also complain about their inability to comply with the conditions of the new agreement, and have warned Pakistan time and again that they would divert their transit cargo to Iranian ports. But Islamabad did not pay heed to the warnings.