Afghanistan-Pakistan Transit Trade Agreement
The 2010 Afghanistan-Pakistan Transit Trade Agreement (APTTA) seeks to enhance cross-border commercial ties between Afghanistan and Pakistan for the economic benefit of both countries. Specifically, APPTA is helping to expand trade beyond the two main road routes (Peshawar-Torkham and Chaman-Spin Boldak) and two potential future rail routes (Karachi-Peshawar and Karachi-Chaman). In total, it makes available eighteen new road transit routes to both countries. For example, it allows Afghan trucks to carry exports to Pakistan’s ports of Karachi, Qasim, and Gwadar, and return with Afghan imports from Pakistan or third countries. Pakistan is benefiting from trade expansion to Central Asia and improved access to raw materials for its industries. Afghanistan’s participation in the APTTA agreement in recent years has helped it to meet its WTO requirements for accession (becoming the WTO’s 164th member this past July) and to bring Afghanistan’s policy, legal, and institutional framework in line with the WTO agreements and principles.
Since its signature in July 2010, some progress has been made toward the implementation of the Afghanistan Pakistan Transit Trade Agreement, though Afghanistan continues to face many challenges, for example in connection with the long “dwelling time” of containers in Karachi port, Pakistan checking far more than 5% of Afghan goods per truck, lack of electronic payment systems for customs duties, failure to declare Afghan goods customs duty/tax free if only transiting Pakistan, high bank guarantees for trucks, and high insurance guarantees for goods. As recently as 31 August 2016, the Afghanistan Chamber of Commerce and Industries reported that Pakistani authorities were now charging high daily demurrage fees to Afghan trucks seeking to cross into Pakistan and that some 1,000 Afghan trucks had been stopped on the Pakistani side of the Spin Boldak-Chaman border crossing. In early September, the Pakistani Federal Minister for Commerce visited the Afghan border crossing at Torkham to examine first-hand bilateral trade concerns and express his government’s hope to further boost trade and commercial links with Afghanistan and (through Afghanistan) with the Central Asian Republics (for which Afghanistan expects reciprocal relations in connection with Pakistan’s Wagah border crossing into India). Given the continued implementation challenges, the APTTA agreement is under review by the Government of Afghanistan, and after the review is finalized (including recommended amendments to current articles of the Agreement), recommendations will soon be shared with the Government of Pakistan. In addition, Afghanistan will continue to pursue the development of alternative regional trade and transit routes for Afghan products as a means of encouraging full implementation of the APTTA agreement. The further implementation of the APPTA agreement supports the Afghan Government’s Private Sector Development National Priority Program.
Recommended Actions by RECCA-VII and Beyond:
- The Afghan Government should expedite its ongoing review of the APTTA agreement and share with the Pakistani Governments its recommendations for specific APPTA article amendments.
- Afghanistan and Pakistan should explore innovative new measures and forums for dialogue, including informal Track 2 dialogues outside of government (for example, fully engaging the Afghanistan-Pakistan Joint Chamber of Commerce) to work through outstanding issues toward the full implementation of the APTTA agreement.
- In addition, Afghanistan and Pakistan, both members now of the World Trade Organization, should draw on international best practices to build confidence in trade dispute settlement mechanisms (including in combatting non-tariff barriers through effective implementation of the TIR Convention) to further facilitate APTTA implementation.
- Afghanistan should increase its issue of TIR Carnets and pass legislation soon on TIR transit standards, including “TIR Green Lanes”. Afghan transport operators should utilize the TIR Convention to move transit goods from Pakistan to Central Asia.
|Budget & Funding Status||n/a|
|Institutional Partners||Afghanistan and Pakistan (including the Governments and Afghanistan-Pakistan Joint Chamber of Commerce), USAID|