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Old Monday, July 19, 2010
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Default Afghan transit trade

Afghanistan allowed to use Wagah for exports to India: Pakistan-Afghan accord on transit trade

ISLAMABAD, July 18: Coinciding with the presence of US Secretary of State Hillary Clinton, Pakistan and Afghanistan finalised on Sunday the new Afghan-Pakistan Transit Trade Agreement (APTTA), allowing Afghan trucks to carry export goods to Wagah border for onward destination to India.

Under the agreement, Pakistan would also be able to take its trucks through Afghanistan to Central Asian Republics but Indian goods would not be allowed to pass through Pakistan’s territory via land route.

Spearheaded by the United States, the two countries had signed a memorandum of understanding in early last year to sign before December 31, 2009, a revised trade agreement allowing Afghanistan-Pakistan-India trade through land route. The question of allowing trade with India met a strong reaction in Pakistan because of this issue being part of the bilateral trade. As a result, the set deadline was missed.

The minutes of the agreement were signed by the commerce and trade ministers of Pakistan and Afghanistan, Mr Makhdoom Amin Fahim and Dr Anwar-ul-Haq Ahady and witnessed by Ms Clinton and Prime Minister Yousaf Raza Gilani.

“Pakistan and Afghanistan have reached an understanding on all major issues relating to the Afghan Pakistan Transit Trade to conclude the process of negotiations in this regard. It has been agreed that no Indian export to Afghanistan will be allowed through Wagah,” an official statement issued by the ministry of commerce said after the signing ceremony.

An official explained that the draft agreement would be vetted by the ministry of law and then submitted to the federal cabinet for formal approval. He said the Afghan side wanted the formal agreement signing during the Afghan donor conference in Kabul in the next three days. This would, however, not be possible for practical reasons.

He said that vetting by the law ministry and its approval by the cabinet may take at least a week because a cabinet meeting was not scheduled during the upcoming week and perhaps a special cabinet meeting may not be convened for the purpose.

Responding to a question about allowing Indian goods to be airlifted to Karachi airport for onwards transportation to Afghanistan, the official explained that APTTA did not allow taking Indian goods even out of the airport. He said that Indian goods could be airlifted from Karachi to Afghanistan under international laws.

Responding to another question, the official said that Afghan trucks would be allowed to take Pakistani products from Lahore to Peshawar, Torkham or anywhere in Afghanistan on their way back after offloading their goods at Wagah to reduce their transportation costs.

The broad-based “record note” signed by the two sides says that Pakistan and Afghanistan hoped the resolution of all outstanding matters relating to the finalisatioin of APTTA would help in the early signing of the agreement, after completion of legal processes from both sides.

“The agreement thus signed would be an important milestone in the development of Pak-Afghan Trade and Economic relationship to the mutual benefit of both sides,” the statement said.

The Afghan trucks will be allowed to carry Afghan Transit Export Cargo on designated routs to Pakistani seaports and Wagah. The Afghan transport units, on return, shall be permitted to carry goods from Pakistan to Afghanistan under the same expeditious procedures and conditions as Pakistani transport units.

It was also decided that all Afghan transit goods would be exported in containers of international specifications. For a period of three years, the cargo will be allowed to be transported in internationally acceptable and verifiable standards of sealable trucks while the oversize and bulk cargo which is not imported in containers – ship load will be transported in open trucks or other transport units.

The two sides also agreed to transport export of perishable goods in transit in open trucks or other transport units. The drivers and cleaners will be allowed to enter and exit the two countries on short-term work permits identified by biometric devices installed at entry points.

The two sides decided that an Arbitral Tribunal will be established bilaterally. In case of failure to agree on a common name of a third arbitrator, two names of non-nationals and non-residents will be proposed by each side and the third arbitrator will be selected by drawing lots from the four proposed names.

To tackle the issue of unauthorised trade, the two sides agreed to install tracking devices on transport units and a mechanism for custom to custom information sharing (IT data and others) will be established.

In this context, it has also been agreed that financial guarantees equal to the amount of import levies of Pakistan have to be deposited by authorised brokers or custom clearing agents to check the un-authorised trade and these deposits will be released after the goods exit the country. In case, the goods do not exit the country within specified time, the guarantees will be encashed by custom authorities. Moreover, the agreement to be signed will be subject to any other measures to be taken by APTTA
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