Pakistan and Afghanistan initiated bilateral discussions in Kabul regarding trade and border crossing procedures for both parties. The two countries came upon an agreement to strengthen Pak-Afghan trade through a luxury bus service that travelled between the two borders.
Recent news from Kabul revealed that Pakistan and Afghanistan reached an agreement last Thursday to take any actions necessary for jump-starting a luxury bus service. The vehicle would cover areas between Peshawar, Jalalabad, Quetta, and Kandahar. Both parties aim to launch the service by the end of August 2022.
The bilateral discussions lasted for three days, and the neighboring countries settled on addressing the tricky visa process through mutual coordination. Moreover, both sides reaffirmed that they would continue to maintain positive relations, promoting economic growth for the countries. Additionally, Pakistan and Afghanistan decided on several measures to guarantee early visa acceptance and free flow of trade traffic to safeguard the transport of trade goods.
Pakistan’s Secretary of Commerce, Muhammad Sualeh Ahmed Faruqui, and Afghanistan’s acting Commerce Minister Nooruddin Azizi led the talks in Afghanistan’s capital with the assistance of acting Foreign Minister Amir Khan Muttaqi.
The Pakistani delegation visited Afghanistan to discuss plans for boosting bilateral trade, open transport, and connectivity to facilitate necessary trade measures. The central goal of this visit was to tackle the problems bombarding Pakistani and Afghani importers and exporters.
The delegation included representatives from all Pakistani ministries and departments that manage economic connections, cross-border transit, international trade, foreign exchange, and border crossing points.
Furthermore, during the discussion, the two parties saw that trade and transit between borders registered economic growth throughout the last fiscal year. Both countries decided to sustain this growth for mutual financial benefit.
The Development of Pak-Afghan Cross-Border Trading
Pakistan has been assisting Afghanistan since 15th August 2021, when the Taliban captured Kabul and declared their rule over the country. Islamabad offered Kabul humanitarian assistance along with tax and duty waivers on the fruit and vegetable trade.
Additionally, Islamabad has offered to encourage imports from Afghanistan by fulfilling Kabul’s demands for duty-free imports of food items to counter the increasing food inflation.
Moreover, talks in Kabul concluded that Pakistan and Afghanistan would make border-crossing points more efficient to support trade clearance and traffic flow on a priority basis.
Therefore, a top-tier Pakistani delegation led by Razak Dawood, an experienced Commerce Advisor, will connect with a high-end Afghani delegation. The Pakistani counterpart will comprise senior bureaucrats and National Security Advisor Moeed Yousuf.
According to official reports, this high-profile visit from Pakistan will initiate the cross-border flow of vehicles and pedestrians at the Torkham border. Increased facilitation in truck transport is expected to increase cross-border imports from Afghanistan.
One of the trade products that both countries are facilitating is coal for power generation and increased electricity production. As furnace oil prices are skyrocketing in international markets, coal trade across borders can save transportation costs and bridge the electricity shortage in both countries.
Pakistan is already importing coal in small amounts for power supply through the Chaman border station in Balochistan. The new agreement will establish custom stations in Kharlachi and Ghulam Khan in Khyber Pakhtunkhwa to facilitate coal imports.
The imported coal will be utilized in power production at Hubco and Sahiwal plants. Additionally, on 5th July, Pakistan’s government authorized the exchange of rupee-denominated goods across land routes to smooth cross-border trading.
Official reports claim that increased coal imports will counter the country’s energy crisis on a large scale. The government has arranged to import coal in trucks across land routes with Kabul.
How Has Pakistan’s Government Promoted Trade with Afghanistan?
A delegation of traders and industrialists led by Khurram Gulzar, Coordinator to Federal Tax Ombudsman, conducted a meeting with Meher Kashif Younis, who said that Pak-Afghan trade has the potential for sourcing the livelihood of thousands of citizens. This trade agreement will help both countries progress and develop their economies.
Pakistan’s government made the bold decision to permit the trade of all kinds of products for a year with Afghanistan in rupee through land routes. This step means that both countries won’t have to worry about the absence of tradeable currency via banks, a high-stake demand of the international market, which can assist Pakistan and Afghanistan in balancing their payments.
Both governments would maintain this regime until Afghanistan can establish regular banking channels again.
Afghanistan has been the third largest source of export for Pakistani products. However, recent political and economic instability trends in the neighboring countries have changed the trade status between Pakistan and Afghanistan. This initiative for revitalizing Pak-Afghan bilateral trade can generate around a billion dollars annually, and Pakistan’s government is willing to take all necessary actions to facilitate this development.
Border control officials immediately urged installing more scanners at the Torkham border for safety and quality control measures. Additionally, Meher Kashif Younis declared that the poor infrastructure at border crossing points would be restructured and updated to fit modern standards to ensure a smooth flow of trade products at both ends.
Furthermore, the government declared they would relax the visa requirements for cross-border trade with Afghanistan last Tuesday. This decision was finalized in the federal cabinet meeting led by Prime Minister Shehbaz Sharif.
Representatives of the Prime Minister’s Office stated that the PM informed all authorities associated with issuing six-month multiple-entry visas to traders from Afghanistan about the new relaxed policies. Moreover, he approved the business proposals presented by the Afghan Inter-Ministerial Coordination Cell.
The federal cabinet informed all Pakistani embassies abroad to evaluate Afghanistan’s visa applications on nationality and passport rather than country of residence. Furthermore, the cabinet stated that a sub-category of the work visa must be officially introduced in the online visa procedure.
After the initial issue of the six-month multiple-entry visas, the interior ministry of both countries would be authorized to extend the visa to one year.
Conclusion
Due to the current economic crisis and import ban in Pakistan, the government needs to strategize a contingency plan for boosting the country’s exports. Afghanistan is a neighboring Muslim country, creating trust and dependability between the two parties.
Moreover, the border between the two countries is linked by established land routes, which can be developed for low-cost and efficient cross-border trade.
