Friday May 29 marks first day of transit trade between Pakistan and Afghanistan through Gwadar Port. The operations through Gwadar port to Afghanistan is a great news for Pakistan as the trade will not only reduce friction between the two nations that constantly arise related to APTTA but will also increase local employment in Pakistan due to local packing, loading and unloading. Advisor to Prime Minister on Investment and Commerce, Abdul Razzaq Dawood shared the news via his twitter account.
Afghanistan-Pakistan Transit Trade Agreement (APTTA)
The trade between Pakistan and Afghanistan is conducted under the Afghanistan-Pakistan Transit Trade Agreement (APTTA) that was signed in 2010. Pakistan exports wheat, cement, sugar and rice to Afghanistan and in most commodities, Pakistan’s exports consist of around 90% of Afghanistan’s consumption.
The huge dependence of Afghanistan on exports from Pakistan was one of the reasons PM Imran Khan allowed transit trade through land to Afghanistan since the very beginning of coronavirus.
Among imports from Afghanistan, edible nuts, fruits, vegetables, mineral fuels, oils, distillation products and cotton are some of the main commodities. In 2019, the imports from Afghanistan constituted around $580 million while exports to the country constituted around $1.2 billion.
The trade transit rules for Afghanistan and Pakistan under APTTA has been a constant source of criticism and conflict between the countries. Pakistan implements strict regulations on Afghanistan for utilizing the trade route to India through Pakistan. Similarly, Afghanistan has been stubborn in providing trade gateway to Pakistan through Afghanistan to Central Europe.
Trade via Gwadar to provide employment and strengthen legal trade
The opening of Gwadar port and the beginning of sea route trade is a new means to establish trade rules and regulations for local industry as well as Afghanistan as trade partner. The Gwadar port trade will provide local daily laborers an increased opportunity. Abdul Razzak Dawood announced in his tweet that it is for the first time that fertilizer will also be locally packed and loaded which will employ daily wagers.
The government has also provided permission to Afghanistan to for transit trade of sugar and wheat with sealed consignments only. This will significantly reduce millions for Pakistan that are lost in smuggling and unauthorized packed goods to and from Afghanistan.