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Kabul puts off transit trade meeting with Pakistan

Updated October 11, 2017

ISLAMABAD: Kabul has unilaterally put off a meeting of the Afghanistan-Pakistan Transit Trade Coordination Authority (APTTCA), a high-level forum set up to deal with problems hindering smooth implementation of a revised transit treaty. The last meeting of the authority was held last year.

The suspension of talks is likely to translate into a decline in trade between the two countries. Pakistan’s exports to Afghanistan dropped by a significant 27 per cent over the past one year, owing to several factors.

The exports to the neighbouring country had reached an all-time high of $2.4 billion in 2010-11. It remained above the $2bn mark in the following two years — 2011-12 and 2012-13. Since then, exports have dwindled and hit $1.43bn in 2015-16.

In the first two months (July-August) of the current financial year, exports were recorded at $213.47 million. This shows that the total exports to Afghanistan will be about $1bn when the figures for 2017-18 are finalised.

A source told Dawn on Tuesday that the Afghan commerce ministry had conveyed to Islamabad its decision to postpone the meeting through the Pakistan High Commission in Kabul. “We have received a formal letter in this regard,” the source said.

Step likely to hurt bilateral trade

It said the postponement of the meeting was linked to Kabul’s demand that India be included in the bilateral and trilateral transit trade agreements.

Kabul wants to include India in the Trilateral Transit Trade Agreement between Pakistan, Afghanistan and Tajikistan.

According to the source, Kabul also wanted to gain access to Indian market and those of the other member countries of the South Asian Association for Regional Countries through the Wagah border crossing.

Under the treaty, Afghan trucks are allowed to transport goods via a land route to the Wagah border. However, the trucks are not allowed to transport Indian goods to Kabul.

“The cost of transportation borne by owners of the trucks is high because of the one-way traffic allowed,” the source said.

According to the source, Pakistan had sent a request to Kabul to share draft of the amended Afghanistan-Pakistan Transit Trade Agreement as agreed at the last APTTCA meeting.

Foreign Office spokesman Nafees Zakaria confirmed that the APTTCA meeting had been rescheduled and that the request for the postponement had come from Afghanistan.

Officials of the commerce ministry here admitted that frequent closure of the Pak-Afghan border had contributed to the steady decline in exports to the neighbouring country. In the outgoing fiscal year, the border crossing either at Chaman or Torkham was closed at least four times. As a result, the uncertainty in transit trade has increased manifold in the past one year.

In 2016-17 the number of containers of 200 feet travelling to Pakistan fell to 70,305 against 84,583 containers imported the previous year, reflecting a decline of 16.9 per cent.

According to a source in the Customs department, effective anti-smuggling efforts made at the border crossings, especially at Chaman, had also served to reduce the profit margins for smugglers previously willing to bring goods from across the border after getting them cleared at the Afghan dry ports.

According to the sources, the container flows have declined, but a growth has been witnessed in the trading of three essential products — frozen chicken, sugar and edible oil. These products are widely used in Afghanistan.

The sources added that one of the reasons behind the decline in flow of cargo was the diversion of Afghan trade goods to Iran. However, the Customs department has no official data to substantiate the claim.

Afghan traders have suffered heavy demurrage, detention and overstay charges owing to the frequent closure of the Pak-Afghan border. They have called for a waiver of demurrage which has also created uncertainty.

The Customs sources said the government had taken several steps to facilitate cargo flows under the transit treaty. Such measures included installation of trackers and use of mobile enforcement units; use of bonded carriers, introduction of WeBoc automated modules, and customs insurance security equivalent to customs duty and taxes allowed in Pakistan.

At the Pakistani ports, more than 90pc of the cargo was cleared the same day, the sources said. The scanning was limited to 20pc of the goods and examination of only five per cent of the containers was random system-based.

Published in Dawn, October 11th, 2017