PESHAWAR, Dec 19: Afghan traders are importing different types of raw materials by misusing the Afghanistan Transit Trade Agreement (ATTA) for Pakistani industries, it is learnt.

The trade agreement, signed in 1965 between Pakistan and Afghanistan, is not only a major source of supply of consumer goods to its local markets, but now the facility is even misused for providing cheap raw material to feed the local industries, manufacturers in Peshawar told Dawn.

“Soaring import duties and the current energy crisis coupled with macroeconomic meltdown had made running of industries extremely difficult, so the easiest way of cheap imports is (ATTA),” said a leading industrialist, requesting anonymity. Raw materials, according to him, are being imported from different destinations by Afghan traders under ATTA, which after reaching Jalalabad, the bordering town of Afghanistan, are sent back to Pakistan.

Organised gangs of smugglers are involved in this business, which, he said, even take the responsibility of safe delivery of consignments at any destination inside Pakistan. Citing the example of stainless steel, he revealed that one container load if imported through legal channel cost Rs800,000, whereas the same consignment would cost Rs300,000, if imported through ATTA.

Higher interest rates, duties on imports and energy shortage were the reasons that were pushing up the cost of manufacturing in Pakistan, making its products less competitive in the international markets, he said. Pakistan and Afghanistan had signed the ATTA to facilitate transit trade of Afghanistan. Since long the facility is being misused, as goods reaching Afghanistan are finding their way back into Pakistan, damaging the local industries.

Pakistan had been maintaining a negative list consisting 24 different items, which could not be imported under the ATTA in a bid to protect the local industry. But by the time this list was reduced to two items, as currently only cigarettes and automobile are banned to be imported under ATTA.

With the present economic turndown, the volume of Goods in Transit to Afghanistan (GITA) is increasing, whereas the volume of Pakistan’s export is decreasing, said a Peshawar-based custom official. Pakistan’s export to Afghanistan dropped to $600 million last year from $1.8 billion two years ago, whereas the size of transit business grew up to Rs85 billion in the same period, indicating the facility was grossly misused, the official said.

Currently a number of items such as steel products, electronics, cloth, readymade garments and toilet-paper, consumption of which across the border, he said, was very limited, but its supply had increased considerably.

The growing volume of GITA was also worrying the authorities responsible for countering the re-entry of these goods into local markets, as measures were being taken to counter this trend, said Raja Sikandar, Director General Custom Intelligence, when approached by Dawn.

He said countering the smuggling of GITA into Pakistan was a difficult task because the two countries shared a porous border and its surveillance was out of the reach even for the combat forces.