Transit trade

15 Jul 2020


THE decision to restore the transit trade facility for Afghan exports to India through the Wagah border should go a long in reinforcing Islamabad’s political and economic ties with Kabul. Islamabad has already resumed bilateral trade and the transit trade facility at all the border crossings with landlocked Afghanistan, which largely depends on Pakistan for its trade with most of the world. The resumption of the transit trade facility via Wagah will help strife-ridden Afghanistan immediately boost its exports to India and support its economy. Pakistan, which has played a critical role in the US-Afghan Taliban peace accord, had restricted bilateral trade with Afghanistan while completely stopping transportation of Afghan goods to India through Wagah under the 2010 Afghanistan-Pakistan Transit Trade Agreement in March. The decision was taken as part of the lockdown enforced across the country to halt the spread of Covid-19. However, the suspension of transit trade was viewed with suspicion in Kabul and had drawn criticism from both the Afghan administration and traders who were forced to airlift their cargo at a much higher cost or use the longer sea route to ship their goods to India. Many saw it as a violation of the APTTA owing to the trust deficit between the two nations.

The APTTA, which was brokered by the Obama administration to replace the outdated 1965 accord, is also considered ‘incomplete’ by many in Kabul because it does not extend the transit facility to India to ship its goods to Afghanistan and beyond because of fractious Pakistan-India ties. Indeed, a joint South Asia-Central Asia corridor offers huge potential for increasing regional trade. At the time that the APTTA was concluded, many were hopeful of an eventual reduction in tensions between Islamabad and New Delhi, and expected both nations to extend transit facilities to each other. Sadly, it has not happened. Instead, the two sides’ fragile economic relationship has deteriorated further in recent years, owing largely to the brutality of Indian forces in India-held Kashmir, thus pushing away the goal of a free-trade area in South Asia. India, being the regional economic powerhouse, should realise that its growing disputes with its neighbours are keeping it and the region from realising their true economic potential. The sooner it starts mending fences with smaller neighbours, the better it will be for the future of the people of the region that houses the most number of the world’s poor.

Published in Dawn, July 15th, 2020