Afghan Pak Transit Trade Agreement - Facts and Irritants

06 August, 2010

By Afshain Afzal

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A word of thanks needs to be offered to Washington for facilitating and broking Afghanistan-Pakistan Transit Trade
Agreement (APTTA) but there are certain clauses that would be not in the Pakistan’s interest. If we recall,
Pakistan and Afghanistan signed a Memorandum of Understanding (MoU) in Washington in May 2009 to begin talks
on a new transit trade agreement. The talks, which proved fruitful under pressures and blackmails led to a bilateral
transit trade pact between Pakistan and Afghanistan, which will replace an agreement signed between the two
countries in 1965.
In the same regard, an understanding was signed by Pakistan`s Commerce Minister Makhdoom Amin Fahim and
his Afghan counterpart Anwar-ul-Haq Ahady in the presence US Secretary of State Hillary Clinton. The agreement
would allow Afghan trucks to carry export cargo to Pakistani seaports and the Wagah border post. The Afghan
trucks on their return will be permitted to carry goods from Pakistan to Afghanistan.
It is pertinent to mention here that Pakistani trucks would not be allowed in either the export Afghan cargo to India
or Pakistani cargo to Afghanistan. In the same regard, ‘Afghan Trucks† has been specifically mentioned in
the agreement to bar Pakistan trucks from handling the cargo. This aspect is not in the interest of Pakistan as it
may lead to many complications at a later stage. The western propaganda machinery is misguiding the Afghan
authorities that Pakistan Army and Intelligence agencies had expressed their reservations on trade between
Afghanistan and India through land route in Pakistan. It is being projected in the media that Pakistan that Pakistan
is against Afghanistan trade with India but this is not the case. The factual position is that Pakistanis hesitant in
allowing export of Indian commodities to Afghanistan through its territory as it will have serious implications on
security and would damage the Kashmir policy of Pakistan. The issue that requires to be worked out is that
Islamabad desires that goods to be transported under this agreement should be scrutinized thoroughly before they
are allowed to pass through Pakistani territory to India.
It is pertinent to mention here that Indian exports to Afghanistan are being transited through Karachi Sea Port
since 1965. However, due to the security reasons Pakistan cannot allow Indian exports to Afghanistan through
Wagah. As regard to export of Afghan cargo to India, Pakistan wants Afghan trucks to use designated routes and
remain on Pakistani side of the Wagah border to unload their export cargo. Once this is done empty Indian trucks
will be allowed to cross Wagah border and enter Pakistani side, from where Afghan cargo will be transferred to
Indian trucks. Empty Afghan trucks at Pakistani side of border on return to Afghanistan would be allowed to carry
Pakistani exports to Afghanistan through designated routes. All Pakistan Chamber of Commerce and Industries
have also expressed their reservations but these could always be worked out. In a recent development, a petition
was filed by and Advocate, in which he challanged APTTA in Lahore High Court on account that the agreement was
the violation of the Article 2-A of the constitution. If we recall, immediately after the agreement, Islamabad made
it clear that bilateral transit trade pact would not entitle Indian exports to Afghanistan via the Wagah land route.
In another development, Islamabad clarified that APTTA has not yet been signed between Pakistan and
Afghanistan. It would be interesting to note that Customs authorities of Pakistan and Afghanistan have jointly
drafted a new customs-protocol under the APTTA for the regulation of transit traffic through two countries. The
customs control and transit regime of Pakistan and Afghanistan has been specified in Protocol-III of the new
APTTA. The proposed procedure would ensure security of transit cargo destined for Afghanistan and the monitoring
of the consignments to check their inflow back into Pakistan. Article 10 of APTTA draft, which needs a final
approval, there would be exemption from routine physical Customs inspection. However, if any irregularity is
suspected in view of explicit tampering of seals or locks of the transport unit or some reliable specific intelligence,
physical inspection en route would be allowed. Pakistani Customs authorities would be allowed to break the seals
in order to perform a physical inspection of the cargo en route but they shall affix new seals and record this action
in the Transit and Inland Customs Clearance Documents.
The fact cannot be denied that the government and people of Pakistan want extremely friendly relations with
Afghanistan. Pakistanis consider Afghans as their brothers and are ready to extend all sorts of help and
cooperation. But unfortunately western countries and India are trying their level best to create misunderstanding
and suspicion between the two countries. APTTA is in the interest of both Pakistan and Afghanistan which would
not only provide job opportunity to thousands of unemployed Afghans and Pakistanis but would also help curbing
smuggling. If we recall, Afghanistan was added to the regional grouping of SAARC on 13 November 2005, and
became a member on 3 April 2007.
During the 12th SAARC Summit at Islamabad SAARC countries devised the South Asia Free Trade Agreement
(SAFTA) which created a framework for the establishment of a free trade area. This agreement went into force on
January 1, 2008. Under this agreement, SAARC members were to bring their duties down to 20 per cent by 2009.
There is no doubt that if the SAFTA and APTTA agreements are allowed to get implemented, there will be no force
on the earth to stop development in the South Asian countries. However, the core issue of right of self
determination of people of Jammu and Kashmir is the main stumbling block in the path of progress of South Asia.
Pakistan is not allowing India to enjoy trade facilities or permitting her to trade with Afghanistan through its land
route till the time Kashmir issue is not resolved. There is no hesitance in accepting the truth that Islamabad cannot
even think about allowing New Delhi to avail even a minor facility, till the time New Delhi seriously work on the
implementation of United Nation Security Council (UNSC) Resolutions on plebiscite in Jammu and Kashmir state.

EDITORIAL: Pak-Afghan transit trade

International law makes it binding on the neighbouring nations of landlocked countries to provide transit trade
facilities. Afghanistan’s transit trade through areas that now constitute Pakistan is rooted in history since British
times. Another neighbouring state, Iran’s infrastructure did not allow such a facility in the past. However, now
efforts are afoot to link Chahbahar seaport through a railway network to Afghanistan and further to Central Asia,
but that will take time. Therefore, transit through Pakistan is currently the only viable option for Afghanistan.
Although the recently signed accord between Afghanistan and Pakistan did not concede the Afghan demand of
allowing it transit trade facilities from and to India via Pakistan, ostensibly on the plea that India should allow
Pakistan similar facilities of trade with Nepal and Bhutan in return, that a broad based understanding has been
reached between the two countries is a welcome development. Pakistan’s reluctance to allow Indian goods transit
through Pakistan is rooted in its wariness of the growing Indian influence in Afghanistan. In the context of the
present seeming impasse in peace talks between India and Pakistan, it was hardly expected that Pakistan would
agree to such a concession at this time.

That the US played an important role in getting this agreement negotiated was highlighted by the conspicuous
presence of Secretary of State Hillary Clinton and Special Representative for Pakistan and Afghanistan Richard
Holbrooke at the time of the signing of the record note. The agreement was long overdue since the changing
ground realities and technological advances necessitated the two countries revisiting their previous agreement
signed in 1965. The old method of transit and high import duties or illegal charges by custom officials on both sides
had encouraged smuggling, which incurred a loss of revenue and flooded the Pakistani market with cheap
smuggled goods. Some supplies meant for Afghan destinations transported through open trucks ended up in the
Pakistani market. The use of containers of international specifications for non-perishable goods of appropriate size
is expected to prevent this to a great extent. It is also hoped that the issue of smuggling will be appropriately
addressed in the new Afghan-Pakistan Transit Trade Agreement (APTTA), to be signed after the review process has
been completed by both sides.

Pakistan and Afghanistan have reached an understanding on the broad parameters of Afghan exports to Pakistan
and India and the use of Afghan territory for Pakistan’s exports to the Central Asian states. This is a major
achievement as Pakistan had dreamed of accessing Central Asia since the collapse of the Soviet Union in 1991,
which yielded 15 new states and thus offered new markets, which, like Afghanistan, are landlocked and have vast
economic and trade potential. Geographically, routes to the south for Central Asia are most feasible for trade, as
other directions involve long distances, lack of infrastructure or prohibitive climate and topography. If Pakistan is
successful in tapping the Central Asian markets, it can become a major trade corridor through the Karachi and
Gwadar seaports. Similar attempts are being made by Iran through developing the Chahbahar seaport, which is
located on the Makran coast in the Sistan-Balochistan province in Iran, just a few kilometres away from Gwadar
across the border. It has been officially designated as a Free Trade and Industrial Zone by the Iranian government.
In such a competitive environment, better transit services and more developed infrastructure will give an edge to
Pakistan. Tapping this potential is of critical importance for Pakistan’s heavily aid-dependent economy. *

SECOND EDITORIAL: Dam it

The recently reconstituted Council of Common Interests (CCI), rejuvenated after some fine-tuning in the 18th
Amendment, has unanimously passed a resolution approving the construction of the Diamer-Bhasha Dam.
Proposed to be built on the Indus River, about 315 km upstream from Tarbela, the approval could not have been
more welcome. The CCI has delivered a national consensus for a dam that will go a long way in addressing our
energy crisis and water scarcity.

Because of Pervez Musharraf’s insistence on constructing the Kalabagh Dam, not a single megawatt of electricity
was added to the national grid in his nine-year tenure, neither in thermal nor any other form. Despite his efforts,
cajoling, and even making concessions to the opponents of the controversial Kalabagh Dam, no consensus could be
forged; if anything, opposition to the Dam in Sindh and Khyber Pakhtunkhwa hardened in response. More
acceptable projects such as Diamer-Bhasha should have been started immediately it became obvious that
Kalabagh was a bird that would not fly. It was time to do the doable to pull the country out of the energy deficit pit
into which Musharraf had pushed it.
The minimum time required for building the Diamer-Bhasha Dam is projected at nine years — three to build the
roads and other infrastructure before heavy equipment can be moved into such difficult terrain, and six to actually
construct the dam. If only the previous government had had the foresight to put into action what this government
has now decided to do, we would have been well along by now in the construction of Diamer-Bhasha and closer to
gaining an additional 4,500 MW of much needed electricity, apart from storage of 6.4 MAF of water. One
controversial issue that is still pending is the location of the power house, as that will determine which province
would obtain the net profit once it comes on line, whether Khyber Pakhtunkhwa or the newly created Gilgit-
Baltistan.

The government is now urged to ‘get on with it’. Our power shortage, threats to food security and water scarcity
that is damaging agriculture do not give us the luxury of any further dilly-dallying. Now that the consensus decision
has been made by the CCI, the Diamer-Bhasha Dam must be built on a war footing. *

According to kamena matlab zardari

ASHGABAT: President Asif Ali Zardari Wednesday said Pakistan's bilateral relations with Afghanistan were the most important
component of its shared quest for peace and stability in the region.

Talking to President Hamid Karzai, here in the capital of Turkmenistan the President said Pakistan was fully committed to long term
peace and stability in Afghanistan.

The President is in Turkmenistan to attend the International Nowruz Festival, that is being attended by leaders and representatives
from 11 countries.

President Zardari referring to Pakistan's quest for peace in the region said the release of Taliban prisoners by Pakistan was done on
the request of the Afghan High Peace Council. He said it was a demonstration of Pakistan's sincere support to the reconciliation
efforts of the Afghan government.

The President said Pakistan was sincere in its endeavors and fully supports an Afghan led and owned reconciliation process in
Afghanistan.

He said Pakistan has suggested to the Afghan Government to hold ministerial meetings on transit issues and border management.
Both these meetings were agreed to in Chequers during the Pakistan-Afghanistan-UK trilateral summit. He said a peaceful, stable
and economically developed Afghanistan was in Pakistan's interest.

President Zardari said despite Pakistan's own financial constraints, it was providing bilateral assistance of $ 300 million to
Afghanistan. He said Pakistan's development projects in Afghanistan include building of large hospitals in Kabul and Logar, a high-
tech Kidney Center in Jalalabad, faculty blocks in Kabul and Nangarhar Universities, Engineering University in Balkh, schools and
roads.

The President said closer coordination between the security forces of the two countries was important for effective border
management. He said it was also important to deter cross border incursions, illicit drug trade, smuggling and illegal movement of
people.

President Zardari pointed that there was a clear nexus between drug trade and terrorism and it was necessary that this chord was
cut.
The President said there was also a need to defeat the mind set which promotes extremism and terrorism. He said both the
countries have suffered enormously at the hands of this scourge.

Referring to the bilateral trade and economic ties between the two countries, President Zardari said Pakistan was ready to discuss
trade with Central Asian countries at Commerce Minister's level.

He also stressed extension of Afghanistan Pakistan Transit Trade Agreement to Tajikistan and grant of access to Pakistan through
Wahkhan corridor.