Eight items removed from the negative list of Afghan Transit Trade Agreement


Apr 14 - 20, 2003











Abolition of 8 items from negative list of Afghan Trade Agreement, increased PIA flights to six per week from two, enhanced access through land routes, lowering freight charges and holding Pak-Afghan Ministerial Meeting thrice annually were the decisions made during Ministerial Conference last month, Shaukat Aziz disclosed in a press briefing. He has accompanied by Khalid Said, Additional Secretary Ministry of Commerce and Aziz Ahmed Khan, Spokesman and Additional Secretary, Foreign Office. He described the talks a major breakthrough in economic relationship of both the countries.

The eight items removed from the negative list of Afghan Transit Trade Agreement include cotton yarn, polyester fibre, ball bearing, timbers, tape recorder, glassware/dinner sets, juicers/blenders and video cassette recorders (VCR)/video cassette players (VCP). Imposing duty on the goods re-exported to Pakistan and holding single country exhibition of Pakistani goods in Afghanistan to promote trade between the two countries were also discussed during the ministerial conference.

As per Afghan authorities estimated amount of $ 2 billion for its reconstruction for coming fiscal, Afghan government's strategy has prioritised roads and telecom, education and health sectors at the higher side of planning. They also believed mutual dependency would override the issues like blaming Al Qaeda suspects in Pakistan. For this purpose some sub-contracts have been given to Pakistani firms.

Pak-Afghan Ministerial Commission would be held thrice annually. This session was a turning point as both the countries are opening doors for increased economic relations. In mutual trade the results are good. Most of the goods used there were from Pakistan, said Shaukat Aziz. There are estimates that transit trade could grow at 50 per cent and overall trade 100 per cent.

Including eight items deletion, railway fare is being cut by 22 per cent for Afghan imported goods while an extra rate was being charged on goods to be transported to Afghanistan. Karachi Port Trust and Port Qasim would provide more space for Afghani goods. The process of clearance of goods from these ports is being improved.

Gwadar Port was also discussed as a key access point for Afghan and Central Asian States. In this connection, ADB would hold meeting for roads, storage capacity there. Afghan government evinced keen interest in Gwadar Port as they were told that it would take only 6 hours to reach from Gwadar to Spinboldek/Chaman. It would be a real opportunity for the Central Asian States as well.



Pakistan's $ 100 million assistance has been turned into grant in which $ 18 million out of it has already been spent. For next year $ 5 million commodity and $ 15 million project aid would be given. Turkhem-Jalalabad link is being surveyed by Nespak Pakistan, which would come under the project aid. Other fields of assistance are education, health care driven assistance, technical assistance in police, banking training, post office and micro-finance for Khushhali Bank.

Hamid Karzai has approved PIA's six flights a week three from Islamabad and Peshawar to Kabul. In fact two flights are operating from Pakistan weekly. Quetta-Kandahar flights would be arranged after some time. Moreover, Afghan government has completed banking licensing policy and National Bank of Pakistan is sending a second team to finalize arrangements for trade finance and remittances to Afghanistan. Afghan government has also instructed their Ambassador to issue visas to Pakistan traders and a delegation from Serhad Chamber of Commerce just arrived in Kabul.

The contract of Spinboldek to Kandahar Road has been awarded to a Pakistan firm Echo West on the basis of open tender for $ 25 million. This construction project would be financed by a consortium led by Asian Development Bank.

Most of the reservations about the prospects of increased Pak-Afghan trade and economic co-operation will appear to have been removed, following next Pak-Afghan Ministerial Commission meeting.

The Kabul visit of the Pakistan delegation for the ministerial meeting also provided an opportunity to Shaukat Aziz to discuss further co-operation between the two countries with Afghan President Hamid Karzai, on various issues related to reconstruction of Afghanistan's devastated economy, in which Pakistan has been actively participating.

It will be noted that the reluctance of Pakistan government to abolish the entire negative list is largely owed to genuine fears of smuggling back to Pakistan most of the items not much in demand in Afghanistan. However, fears should be subside, thereby helping progressive contraction of the negative list leading to its abolition.