PAK-AFGHAN TRADE POLICY

Pakistan has agreed to delete six more items from the negative trade list

From SHAMIM AHMED RIZVI,
Islamabad

Aug 18 - 24 , 2003 

Despite intermittent provocations by some pro-Indian warlords of former northern alliance on the border, Pakistan displayed magnanimity during second meeting of Pak-Afghan joint ministerial meeting held in Islamabad last week and offered its maximum cooperation and help in rebuilding the war-torn brotherly neighbour.

Appreciating the official point of view of Afghan government on recent attack on Pakistan Embassy in Kabul and border skirmishes did not reflect the policy of President Karzai government, Pakistan reiterated its pledge to work for the development, reconstruction and prosperity of Afghanistan. A strong stable and economically viable Afghanistan is of vital importance for peace in the region, Prime Minister Jamali remarked, while talking to Afghan delegation. "Let us forget the past and focus on the future", he added. Afghan delegation headed by their Finance Minister also called on the President Gen. Pervaiz Musharraf who pledged full support to Afghanistan reconstruction.

Pakistan has agreed to delete six more items from the negative trade list, besides sending sugar to Afghanistan to sweeten the bitter ties with its southern neighbour. In a joint press conference, Finance Minister Shaukat Aziz and his Afghan counterpart Dr. Ashraf Ghani also announced cut in freight charges, provision of electricity to Afghanistan as some of the major decision taken by the second round of Joint Economic Commission (JEC), Afghanistan was offered a major concession by accepting all three demands.

Explaining the JEC decisions, Aziz said: "we have agreed to facilitate the Afghan Transit Trade by simplifying the customs procedures and reducing transportation cost by lower Railway carriage charges by 25.30 per cent". He said a high-powered committee, comprising Afghan deputy commerce minister and Pakistani customs chief, would visit Karachi Port Trust, Railways and Customs Offices to chart out a strategy. "We have to be competitive and conductive for Afghan traders", he said. The minister said efforts would be made to remove bottlenecks to resolve all outstanding issues. Aziz said the negative list under the 1965 Afghan Transit Trade Agreement (ATTA) would be reduced further by removing ban from six more items. The list was last reduced to 18 from 24. The decision, to be implemented after the Economic Cooperation Committee (ECC) of the Cabinet approval would leave only 12 items that could not be imported under the transit rules.

Aziz said Pakistan would also provide sugar to Afghanistan under $100 million grant Islamabad pledged for Afghan reconstruction. To enhance utilisation of the remaining balance, which was a total grant, the two sides agreed to immediately invite tenders for the construction of the Torkham-Jalalabad Road. It would fall under the Asian Development Bank's regional infrastructure project.

The JEC also agreed to look at the possibility of laying a Railway track from Chaman to Kandahar to allow the goods transportation speedily and economically, as it would link Karachi directly to Kandahar. Other decisions of the two-day ministerial conference relate to cooperation in banking and postal services and enhancing frequency of PIA flights to thrice a week from Peshawar to Kabul, which was only a 35-minute flight. Pakistan also hoped that the efforts to upgrade road networks would reduce land distance between the two cities to just under five hours.

Perhaps, the most significant development from the Afghan point of view was movement towards the elimination of the Afghan Transit Trade negative list. While not inclined promptly to meet that demand, for understandable reasons, agreement has evidently been reached on Pakistan's offer of removing of six items from that list. Afghan authorities were to specify the six items they would like to see removed from the present list. Since the decision, in this regard, was taken at the first JEC held in Kabul, and considerable progress has been made during this period towards increase in mutual trade between the two countries, the prospects of complete elimination of the negative list by the time of the Third JECs by the end of this year can hardly be ruled out.

Judging from the present tempo of expansion in mutual trade, the remaining months of the year should prove encouraging enough to justify least restricted trade with a marked effort to move forward for a free trade regime. As pointed out by Finance Minister, Shaukat Aziz, Pakistan's share in mutual trade is low and needs increase, particularly in view of the advantage of short distance, thereby calling for improvement in Pakistan's services and removal of impediments, such as restrictions on frequency of flights. As for Pakistan's co-operation with Afghanistan in its reconstruction, it would help in training Afghan customs staff and professionals in micro-finance sector, accounting and auditing banking and post office system. Reference, in this regard may be made to the scheduled arrival in Karachi of a team comprising both Pak-Afghan Customs officials to sort out all procedural issues.

Moreover, Pakistan would be starting work on Jalalabad-Torkham Road in October after completing its feasibility study. Similarly, work on assisting Afghanistan in education and health sectors is also under way. Elaborating upon the developments in Afghanistan through foreign assistance, the Afghan Finance Minister pointed out that $1.6 billion to $2 billion was expected to be contributed by June 2004. Notable was also his reference to Afghanistan's desire also to use Gwadar as a port for future foreign trade.