Afghanistan says high import duties causing smuggling

By Sajid Chaudhry

ISLAMABAD: Afghanistan on Friday said the main cause of smuggling from Afghanistan to Pakistan is higher import duty rates in Pakistan and administrative steps cannot help control smuggling as long as the profit margins are too high. Afghan side asked Pakistani authorities to reduce the import duties that would help reduce the profit margins on smuggle prone items and would help control border smuggling.

The 7th round of Pak-Afghan Joint Working Group on Pak-Afghan Transit Trade Agreement (APTTA) has started on Friday that was jointly inaugurated by Commerce minister Makhdoom Amin Fahim and his Afghan counterpart Anwar ul Haq Ahadi.

Both the sides focused on three lingering issues that have prevented finalisation of the updated transit trade agreement between Pakistan and Afghanistan.

In his formal speech to the joint working group the Afghan trade minister Anwar ul Haq Ahadi said to promote a bilateral trade in the region Pakistan should allow movement of Indian goods through Wagah border into Afghanistan. “There is a need to expand the trade ties and we want to extend such facilities to Pakistan for its trade to central Asia,” he said adding that the transit trade agreement of 1965 only catered for the transit facility to Afghanistan. “But after emergence of big markets in central Asia we can provide transit facility to Pakistan too,” Ahadi added.

Anwar ul Haq Ahadi, while talking to reporters said that facility of imports of Indian goods through Wahga for Afghanistan is available in 1965 Afghan Transit Trade Agreement and continuation of this facility under new transit trade agreement would help Afghanistan meet its import requirements. He said that the issue of transit facility for Indian goods via Pakistan land route would also be discussed during the 7th round of talks.

On the issue of control on cross border smuggling, Anwar ul Haq Ahadi said that a study conducted by USAID is underway and is expected to be complete by September and Afghanistan would take measures according to the proposals of the study.

A member of the Afghan delegation informed that although Pakistan is not ready to allow transit facility for Indian goods for Afghanistan, but despite the fact Indian goods - after being imported into Pakistan are being smuggled into Afghanistan, as there is high demand of these goods in Afghanistan. Movement of Indian goods into Afghanistan from Pakistan through smuggling is having a negative impact on Afghan consumers, as they have to pay higher costs of such goods. If transit facility for Indian goods is allowed, there would be no additional cost for Afghan consumers.

While talking to media, Commerce minister Makhdoom Amin Fahim declined to comment over the Afghan demand for imports from India through Wagah, an official of the commerce ministry said that Pakistan would not allow movement of Indian goods at Wagah to Peshawar route.

“We want India to allow transit facilities to Pakistan for Nepal and Bhutan,” a Pakistani official informed and added that the transit facility for Indian goods for Afghanistan is linked with transit route through India.

In his welcome statement Makhdoom Amin Fahim said that Afghanistan is an important trading partner of Pakistan, and the bilateral trade has grown from $170 million in 2000-01 to $1.49 billion in 2008-09. The Federal Minister said Afghan transit trade through Pakistan has increased from $161 million in 2000 to $1.07 billion in 2009.
ISLAMABAD: Federal Minister for Commerce Makhdoom Amin Fahim, shaking hand with his Afghan counterpart, Anwar ul Haq Ahadi.