Natural free trade zone exists: Karzai

Published December 9, 2003

ISLAMABAD, Dec 8: President Hamid Karzai thinks that the geography of Pakistan and Afghanistan had already devised between them a natural free-trade zone going way back in history.

During a press talk (partly covered on Monday) with a group of Pakistani journalists at the presidential palace in Kabul on Sunday, the Afghan president said a free-trade zone was already in operation between the two neighbours.

When asked why the two countries do not officially recognize it as such the Afghan president shot back: “Well, the people are doing it, who cares about governments.”

He added: “It is already there. A lot of trade is taking place through this zone. If you want to put a stamp of approval by the governments why don’t you try it. We have had a lot of difficulty in the cabinet trying to judge how to impose taxes, we could not do it, it is impossible.”

Later answering another question he said the average import duty in Afghanistan was 5 per cent against 25 per cent in Pakistan which made it rather difficult to consider the free-trade zone proposal at the official level. He said collecting even this low amount of import duty was posing a big problem for his government.

He, however, agreed that the two countries could study the issue by sitting together and establishing some kind of a joint tariff commission.

He said he wanted Pakistan to give more trade facility to Afghanistan under the Afghan Transit Trade (ATT) arrangement and welcomed the recent removal of some banned items from the ATT list by the government of Pakistan.

He maintained that 80 per cent of Afghanistan’s trade went through Pakistan but did not rule out the possibility of an increase in Afghan trade quantum through Iran as well in the future.

He said for Afghanistan the easiest, the most natural and fastest trade with the rest of the world was from Pakistan.

“The greater the facility given to us by Pakistan the better it would be for our businessmen and more trade will occur between the two countries,” he added.

He said a lot of Pakistani investment had already come to Afghanistan and a number of contractors and companies from Pakistan were operating in Afghanistan, especially in the construction sector.

While he was discussing Afghanistan’s position in the India-Pakistan equation, he said Afghanistan wanted to sell its dry fruit to Pakistan, “and if we have more we will sell it to India as well, we want to get rich.”

He said if Pakistan bought Afghan goods, “we will sell them cheap, if you don’t buy them then we will sell them elsewhere, a bit more expensive.”

He said Afghanistan could serve as a bridge between Pakistan and the Central Asia once peace and stability returned to his country.

He also appeared rather keen on the proposed Turkmenistan- Afghanistan and Pakistan gas pipeline which he said could also be extended to India in due course of time as he said both Pakistan and India would be needing substantial quantities of gas in the near future.

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