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Afghan Transit Trade through Pakistan & Pakistan Afghanistan Bilateral Trade

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Afghan Transit Trade (ATT) through Pakistan is frequently a bone of contention between the two countries. Afghanistan complains that Pakistan is a major obstacle to transit trade with frequent changes in rules. Pakistan on the other hand accuses Afghan traders of blatant misuse of the ATT leading to rampant smuggling and the closure of domestic industry. In addition, the Government of Pakistan is frequently under pressure from its “friends” to ease transit trade rules and also from other stakeholders who fear that Pakistan will lose its ability to “manage” Afghanistan if there is a reduced role for Pakistan in Afghanistan’s transit trade. In 2015, the Pakistan Business Council (PBC) published a Study analyzing the flow of Afghanistan’s transit trade through Pakistan over a 10-year period. The objective of the 2015 Study was to see if there had been any significant changes in transit trade over the years, especially since the signing of the multilateral “brokered” Afghanistan Pakistan Transit Trade Agreement (APTTA) in 2010.

At the time the 2015 Study was being conducted, there was tremendous pressure on the FBR to “ease” transit trade rules which had been agreed under the APTTA. FBR was being held responsible for a drop-in transit cargo and hence Pakistan’s “influence” with the Afghan Government & people. The PBC Study in 2015 had shown that Pakistan was still the major transit route for Afghan imports – accounting for 58% of Afghanistan’s trade and that the drop in trade was more an outcome of reduced Afghan imports in 2014.

Similar to the findings of the 2015 Study, the current Study reveals that Pakistan continues to be the favored transit route for Afghanistan’s imports catering for 54% of Afghanistan’s transit imports in 2015.

Pakistan-China-FTA

Bilateral trade accounts for nearly half of Afghanistan’s exports being destined for Pakistan. Further bilateral trade between the two countries can grow by about $576 million.

The Pakistan Business Council (PBC) is a private sector not-for-profit advocacy platform set up in 2005 by 14 (now 58) of Pakistan’s largest businesses. The PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. More information about the PBC, its members, objectives, activities and a soft-copy of this report can be found on our website: www.pbc.org.pk



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