THE National Assembly Standing Committee on Commerce, in its meeting Chaired by Saeed Naveed Qamar, asked for a second briefing by the Ministry of Commerce on Afghan-Pakistan Transit Trade Agreement (APTTA). The meeting discussed threadbare the issues and challenges in the transit trade with Afghanistan, lessons learnt from past agreements and bilateral proposals for the way forward. Pakistan is providing transit trade facility to Afghanistan under Article V of GATT 1947, Convention on Transit Trade of Landlocked States 1965 and UN Convention on Law of the Sea 1982.
The APTTA 2010 is based on complete reciprocity for allowing access to Pakistan’s exports to Central Asian states. Pakistan gives unhindered transit trade facility to Afghanistan; although bulk of the goods of the Afghan transit trade find their way to Pakistan trough smuggling, hitting hard the local industry. On the contrary Afghanistan is not willing to hold the meeting of Afghanistan Pakistan Transit Trade Coordination Authority meeting for facilitating Pakistan’s exports to Central Asia. The first meeting was held in February 2016. It appears that Afghanistan has linked transit facility for Pakistan’s exports with its imports from India via Wagha border. Moreover, it has imposed tariff and non-tariff bearers on bilateral trade, which has resulted in a decline of $800 exports for Afghanistan.
The government wants to increase the quantum of exports to Afghanistan to recapture the lost market in addition to exploit the market potential in Central Asia. An overall target $ 28 billion exports has been set for all destinations. To achieve this target, value added products must be competitive in terms of price, quality and innovations. Bulk of export products consume imported raw material and intermediate goods, which have become very expensive due currency depreciation of over 30 percent. High electricity tariff is also adding to the cost of production. There is dire need of setting up industry of raw material and intermediate goods besides lowering the electricity tariff.
