Afghanistan Pakistan Transit Trade Agreement (APTTA), entered into force on February 12, 2011 has been delayed for four month. The delay is due to unresolved articles of implementation provided in the Agreement involving customs duties for goods and financial guarantee for vehicles.
A high-level Afghan delegation headed by Mr. Muhammad Sharif Sharifi, Deputy Minister of Commerce and Industries of Islamic Republic of Afghanistan attended an inaugural meeting from February 11th – 12th of the Afghanistan Pakistan Transit Trade Coordination Authority (APTTCA) in Islamabad together with their Pakistani counterparts. The delegation included Afghan private sector representatives led by Mr. Khan Jan Alokozai, Deputy Chairman of ACCI.
Private sector representatives at the meeting report their disappointment in the way Pakistani officials conducted negotiations to resolve some of the Agreement’s implementation issues. Their unreasonable interpretation of key articles in the Agreement and unwillingness to find common ground that benefits both parties of the Agreement only served to reinforce the private sector view that Pakistan will continue to delay the full implementation of APTTA for as long as possible.
At a press conference held on February 15th, ACCI expressed the private sector concerns regarding the difficulty in dealing with Pakistan on trade issues and remarked that the postponement of APTTA is not in the best interests of Afghanistan or Pakistan and especially for the private sectors in both countries.
ACCI’s Chief Executive Officer, Mohammad Qurban Haqjo told the assembled media, “As has been reported, there were different readings of the Agreement’s context and therefore its implementation was postponed. You may recall that we expressed our concerns on some of these points a while back, arguing that inconsistent interpretations would create problems for the implementation of the Agreement.”
According to Mr. Haqjo, the major point of difference is the financial guarantee, where a minimum of two million Pakistani Rupees will be assessed against each container of goods that Afghan traders will have to pay while transiting through Pakistan. “Considering the volume of Afghan goods that passes through Pakistan daily, it is too big an amount of money. Even it may exceed the cost of the cargo transaction,” said Mr. Haqjo.
The ACCI head quickly added, “It is against the Agreement.”
Next, Mr. Khan Jan Alokozai, Vice-Chairman of ACCI took to the podium. “We are here,” said Mr. Alokozai “to clarify that it is not the Afghan side that is not ready to apply APTTA, as some media outlets have reported.”
“As you know, there were a lot of weaknesses in the earlier trade Agreement between Pakistan and Afghanistan, signed in 1965. It was not able to address the current transit issues between Afghanistan and Pakistan,” added Mr. Alakozai.
“From the very beginning, when the new Agreement was being drafted in cooperation of our international friends, we insisted on following three points:
1. Afghanistan transit should be facilitated based on international rules and regulations;
2. It should provide the necessary ground for Afghan export; and
3. Pakistani transit process through Afghan soil should be regulated similar to Afghan transit through Pakistan.”
He read some articles of APTTA for reporters to show how it clearly indicates that all possible facilities should be provided for the smooth transit of Afghan goods through Pakistan.
Pointing to the financial guarantee that Pakistan asks against each shipment of Afghan transit goods, Mr. Alokozai said that it is 20% more than the cost of the Lorries carrying the goods.
According to the Vice-Chairman, the conditions set forth by the Government of Pakistan are burdensome and unrealistic. He asked for serious efforts by the Afghan Government to resolve the problem.
Mr. Haqjo closed the press conference by offering the following suggestions:
1. The Afghan government, in concert with the joint coordination committee should be actively engaged in trying to resolve problems faced by the Afghan side; and
2. In the event the problem is not resolved through negotiations, the Afghanistan government should stop the transit of Pakistani Lorries as a counter-measure, and revise the rate of custom tariffs on Pakistani products.
