November 20, 2020

The recent two day visit of Kabul by Prime Minister’s Special Advisor (SAPM) on Commerce and Investment Abdul Razzak Dawood, seemed to have broken the deadlock, furtherering Pak-Afghan economic ties. The SAPM, during his visit met with the Afghan President Ashraf Ghani, Dr, Abdullah Abdullah (Chairman of Afghan High Council for National Reconciliation), Speaker of the Afghan House of People (Wolesi Jirga) and Governor of the Bank of Afghanistan.     

The two Nations are tied in economic relations via bilateral and transit trade as well as informal trade. On the transit trade front, both signed the transit trade agreement known as Afghanistan-Pakistan Transit Trade Agreement (APTTA) in 2010, which is going to be expired in February, 2021. On the bilateral trade front, the two countries currently have very less trade volume, which currently stands at around $1billion while informal trade surpasses bilateral trade volume with $2 billion.            

All this left much to be desired to boost up economic relations between the two states. The visit was crucial in the sense that the two countries did not hold any Afghanistan Pakistan Transit Trade Coordination Authority (APPTTCA) meeting since 2016. During the visit, the 7th round of APPTTCA was held, which demonstrated the willingness of political leadership of both countries to work collectively in resolving challenges that are impeding the bilateral relations and to ensure smooth crossing of transit and trade cargo across borders.

The visit was also fruitful in setting the timeline for future APTTA and Preferential Trade Agreement (PTA) to be finalized, by the end of January 2021. Both Islamabad and Kabul also agreed to move towards more formalization of their trade through documented arrangement, also streamlining the informal trade. The two neighbors also signed memorandum of understanding on Electronic Data Interchange of Transit Trade, to ensure the rapid and hassle-free movement of the transit goods.

Last month, business leaders, members of chambers of commerce and lawmakers from both countries also attended a two-day seminar on Pakistan-Afghanistan Trade and Investment Forum 2020 in Islamabad and deliberated on ways to open up new vistas of cooperation and boost bilateral trade between Pakistan and Afghanistan.

With all these positive steps in the right direction, it is hoped that both Pakistan and Afghanistan will enter into a new era of economic interdependence and shared prosperity.

Tooba Altaf is an International Relations graduate while working as a Researcher at the Centre for Research and Security Studies (CRSS), Islamabad.

© Center for Research and Security Studies (CRSS) and Afghan Studies Center (ASC), Islamabad.

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