Trans-Asia trade corridor
Posted by Faheem Belharvi
Wednesday, May 01, 2013 – Pakistan and Afghanistan have since long been endeavoring to cobble a viable political and diplomatic relationship but their lack of willingness to back up these efforts by steps in commerce and economy is hampering their efforts.
After the 1965 Afghan Transit Trade Agreement ran into snags in the last several decades on account of increase in smuggling and adverse effects on the Pakistani industry and business, both Afghanistan and Pakistan felt need for renewing terms and conditions for bilateral and transit trade. Being a landlocked country and having passed through decades of war with the former Soviet Union on its northern frontiers, Afghanistan direly needed to promote its trade through Pakistan. Although Iran had been trying to provide a cost effective infrastructure for Afghanistan’s trade with the outside world, the latter, on account of multiple economic and political considerations, had a natural tilt towards Pakistan.
With the help of India, with which Iran had, at that time, cordial relations in the wake of chill in its relations with Pakistani over policy regarding the post-Soviet Afghanistan, Tehran not only set up and operationalized its Chabahar Port but also arranged a road and railway line from its port city of Chabahar to Afghanistan’s Islam Qala border point to provide an efficient passage way to the Afghan traders. However, most of the Afghan businessmen preferred trade through Torkham and Kandahar points along the border with Pakistan because, besides other considerations, Peshawar and Quetta provided a lucrative and the closest markets for the Afghan fresh and dry fruits. That is whythe Afghan government had been trying hard to convince Pakistan on renewal of the trade agreement.
At the second trilateral talks in 2009 in Washington, Pakistani President Asf Ali Zardari and his Afghan counterpart, Hamid Karzai, in the presence of Hillary Clinton, the then US secretary of state, announced to begin talks on signing a memorandum of understanding on promotion of transit trade, ‘which would ultimately allow India to use the Wagah-Torkham route for promotion of its trade with Afghanistan.’ In October 2010, the Pakistani cabinet approved the Afghanistan Pakistan Transit Trade Agreement.
Later, the Pakistani Finance Minister Amin Fahim and his Afghan counterpart, Anwarul Haq Ahadi held talks under the mediatory efforts of Richard Hollbrook, the US special envoy for Afghanistan and Pakistan, at which they agreed to allow Afghan trucks to reach goods to Wagah border and Karachi and Gwadar Ports. Both sides also set up a joint chamber of commerce in November 2010 to expand bilateral trade.
However, under the pressure of its media and the political parties, particularly the religious parties, Pakistan did not agree to allow India to pass its exports to Afghanistan through the Pakistani territory ‘because of security reasons,’ albeit it allowed for India-Afghan trade through sea, as per the previous transit arrangements. Pakistani officials also said that their transit agreement was with Afghanistan, not India. This decision annoyed the Afghan government and Kabul accused Islamabad of denying cargo access of Afghanistan to Wagah border. Later, Pakistani officials favoured Afghanistan’s trade with India but said that Indian trucks would not cross the Pakistani territory. That they would unload the goods at Wagah border from where the commodities would be carried to Torkham border in Pakistani trucks. Pakistan also raised the issue of bank guarantees for Afghan transit trade with India. For its part, Pakistan is interested in promoting trade and economic relations with the Central Asian republics.
In July 2012, Kabul and Islamabad agreed to expand Afghanistan Pakistan Transit Trade Agreement to Tajikistan. Under the agreement, Tajikistan would use Pakistan’s Karachi and Gwadar ports for its trade with the outside worlds. Similarly, Pakistan would be able to have trade with Tajikistan under same terms as with Afghanistan. At that time, both Pakistan and Afghanistan described it as first step toward establishing a north-south trade corridor between Central Asia and South Asia. However, due to mutual mistrust and cross interests, the two sides have, in recent times, been giving a lukewarm shoulder to the mutual transit trade transactions. While Pakistan is not willing to include India in its bilateral arrangement with Afghanistan, the latter is reluctant to accept Pakistan’s demand to expand the mechanism to Tajikistan.
The transit trade might prove a step that would not only boost trade linkages and economic growth of the regional countries but also help in ensuring political stability in the region. If both countries set aside their mutual political different – and their false egos indeed – such a trans-regional trade corridor can be developed to the benefits of all the concerned countries and their poverty stricken people, which might not only include Pakistan, Afghanistan, India and Tajikistan, but also the other countries of South Asia and Central Asia, including Bangladesh, Maldives, Sri Lanka, Uzbekistan, and Turkmenistan. The history of Silk Route will definitely take its course. The sooner the better for all the regional states.
(Abdul Hadi Mayar—The author is a freelance journalist based in Islamabad).
