Afghanistan’s transit trade through Pakistan has reached a value of $1.4 billion in the first six months of the ongoing financial year, indicating that the volume can increase to around $3 billion by the end of 2017-18.

In 2012-13, transit trade had slumped to $1.46 billion from $3.12 billion in 2010-11. However, numbers show that the volume has hovered around the $3-billion mark for the past few years. The highest figure in recent years has been $3.46 billion in 2015-16, while in the last fiscal year it was $2.87 billion.

Figures by the Directorate General Transit Trade show $1.46 billion (assessed value) worth of goods passed through Pakistan during July-Dec 2017. Pakistan and Afghanistan signed a transit trade agreement in 2010 under which the former charges zero transit fee. Since then, Pakistan has remained the most favored transit trade corridor for the landlocked country.

However, with the rising trust deficit between the two countries and Afghanistan’s increased engagement with India, the agreement’s fate hangs in the balance.

Afghanistan now wants India to be included in the transit trade arrangement but Pakistan maintains that it was a bilateral engagement and should stay so. Under the Afghanistan-Pakistan Transit Trade Coordination Authority (APTTCA), the two neighbors have so far held six meetings – the last being in 2016. The seventh meeting was scheduled in September last year but it was put off. Minister for Commerce Pervaiz Malik said no schedule for the seventh meeting has yet been finalized.

Also, there are apprehensions that the Afghan transit trade could shift to Iran after India, Iran and Afghanistan signed a $500-million transit accord in 2016. The Ministry of Commerce, however, says there has been no major shift to Iran.  “Figures show that there has been a decline in assessed value and TEUs (twenty-foot equivalent unit) of Afghan transit cargo in 2016-17 but it has increased in the past six months (Jul to Dec 2017),” the ministry said in its response submitted to the Senate Standing Committee on Commerce.

The ministry says decrease in volume of transit trade is due to reduced demand in Afghanistan after withdrawal of NATO forces and drop in international donor funding. Frequent border closures and poor infrastructure at borders are also among chief impediments, said the ministry.


This article originally appeared in The Express Tribune on January 23, 2018. Original link.

Disclaimer: Views expressed on this blog are not necessarily endorsed or supported by the Center for Research and Security Studies, Islamabad.

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