Despite years of bilateral discussions involving political leaders, trade & custom officials and business bodies, the volume of Pak-Afghan trade have failed to match up to its potential. More than the efficacy of various mechanisms, it is the intent of implementing agencies from the concerned countries which leads to meaningful results in trade relations. On this count, the Pakistan government and its various departments score much lower than their Afghan counterparts.
In order to enhance the bilateral trade, a Pakistani delegation led by Commerce Secretary Sualeh Ahmed Farooqi concluded a three-day visit (July 18-20) to Kabul. As in the previous such meetings, the two sides apparently agreed on many things including extension of Afghanistan-Pakistan Transit Trade Agreement (APTTA) 2010 till the signing of revised APTTA, introducing Temporary Admission Document (TAD) in lieu of Visa requirements for Afghan Trucks and Afghan drivers, resolution of technical glitches in WeBoc system (a Pak-developed webbased computerized clearance system), etc. The two sides also agreed to increase operational timings at all crossing points, particularly Torkham, Kharlachi, Ghulam Khan and Chaman/Spin Boldak. However, going by the shabby implementation and a record of long delays on the part of Pakistan, the latest agreements fail to generate much hope.
Earlier this year, the Pakistan-Afghanistan Joint Chamber of Commerce and Industry (PAJCCI) expressed serious concerns over the shrinking trade volume between the two countries. A report by the trade body in February 2022 cited “lack of business-friendly policies, absence of proper barter trade mechanisms, ineffective investment and joint venture policies as the main factors stunting trade growth. Traders from Pakistan also point towards the ineffectiveness of the late and inadequate measures with most of them terming the recent visa relaxation ‘too little and too late’. Zahidullah Shinwari, the former president of Sarhad Chamber of Commerce and Industry, said that it was ‘wishful thinking’ on part of government that the relaxation could bring about positive changes in the existing trading relations between the two countries.
The matters are not helped either with sudden and at times absurd policy changes by Pakistan. Earlier this year, State Bank of Pakistan (SBP)’s new export policy which insisted on payments in US dollars from Afghan buyers created problems for several months. Against this policy, Torkham Custom Clearing Agents Association, Khyber Chamber of Commerce, Khyber Pakhtunkhwa Commercial Exporters and Exporters, and Cargo Transport Association boycotted the clearance of commercial goods bound for Afghanistan for the many days. Pakistani traders and transporters also protested arguing that no formal banking was operational in Afghanistan after the Taliban came to power in 2021. They demanded the Pak government to allow imports from Afghanistan in Pakistani Rupee (PKR). Pak government finally relented on the issue by allowing payment in PKR but not before causing major loss to trade volume.
In another distorting move, Pakistan recently raised the tariffs on the import of fruits from Afghanistan. Afghan famers blame Pakistan of increasing customs tariffs on fresh fruit every year. In September 2022, hundreds of trucks and containers loaded with fresh and dry fruits were reported to be returning to Kabul from the Torkham border due to the tariff issue. Some Importers quoted in Pak media revealed that the arrival of fresh and dry fruits from Afghanistan had declined by 70 per cent since the imposition of 49 per cent regulatory duty on them. According to Shinwari, the latest move by Pak authorities seems strange considering that the country is facing food shortages due to devastating floods. Haji Jabir, an office-bearer of the Khyber Chamber of Commerce, points out that the imposition of regulatory duty was in contravention of the repeated official pledges about an increase in the country’s trade with Afghanistan. Highlighting the increase in economic suffering on both sides, PAJCCI demanded a roll back of the increase on September 8, 2022.
Some analysts view Pakistan’s belligerence in trade and other areas of bilateral cooperation as a manifestation of county’s legacy dispute with Afghanistan on the Durand line. After the regime change in Aug 2021, Taliban administration has complained of many misadventures by the Pakistani forces on the disputed border. The latest of such incidents was reported in September, 2022 by the Taliban regime who strongly objected to firing by Pak forces on Afghan nationals in Burmal district of Patika province along the Durand Line. In its communication to the Pak mission in Kabul, Afghanistan termed the incident as a violation of its sovereignty and responsible building up tension on the border.
If applied properly with empathy to the neighboring nation in a rebuilding phase, a trade policy can work as a harbinger to better bilateral relations in other fields. However, the manner in which Pakistan has chosen to handle the problem till now is more likely to being long term hardships to the citizens of both countries, particularly in bordering areas.