Pak-Afghan trade has once again emerged as a success story despite on-going security and political challenges in the region.

According to government reports in 2018-19, the import value of transit goods reached to over Rs5bn, from Rs3bn in the previous year, showing an increase of 66.6pc. According to officials and businesses involved in Pak-Afghan Trade, this jump in the worth of transit cargo can be attributed to the recent sanctions on Iran.

After the signing of Afghanistan Pakistan Transit Trade Agreement (APTTA) in 2010 and the border closures in 2011, several Afghan importers had diverted their transit imports mostly to Bandar Abbas port in Iran. This seems to be changing as US has toughened its sanction regime on Iran in the last two years. This has resulted in substantial increase of Afghan cargo under transit to the Pakistani ports.

Current statistics on transit trade show extremely positive trends. The cargo trade-flow between the two countries rose 43.95 per cent to 93,732 containers in 2018-19. This is an increase from 60,516 containers in the preceding year. The assessed import value of the transit cargoes also grew a robust 54.88pc to $5.715 billion in 2018-19 from $3.97bn a year earlier.

There are signs that the Pakistani government is positioning to maximize its benefits from this positive shiftin Afghan trading patterns. PM Imran Khan on 20th Nov. directed the Ministry of Commerce to evolve a comprehensive plan within three days to streamline transit trade mechanism for ensuring optimum and mutually beneficial utilization of the arrangement.

PM directed the commerce ministry to present a comprehensive plan identifying required administrative measures to ensure a transparent corruption-free Pak-Afghan transit trade arrangement which would serve business and trade stakeholders both sides of the Afghan-Pakistan border.

The PM in his comments stressed the fact that socio-economic development and stability in Afghanistan is likely to have a positive impact on Pakistan’s own development priorities especially industrial growth and the export sector. He underscored the need for Pakistan to coordinate better with Afghan authorities in order streamline the transit trade agreement and to create a business and trade friendly environment beneficial to both countries and other regional actors.

Importantly PM Khan also underlined the need for employing technology, which would ensure transparency in transit trade arrangements rather than increasing trade barriers.

The high level interest in Af-Pak transit trade issues is a welcome sign. Coupled with a regional environment, which is once again reinforcing the importance of Pakistani ports as transit trade hubs for Afghanistan, these developments are creating new opportunities for Pakistan and Afghanistan to take their trade relations to a higher level. This needs to be followed up by more consistent coordination between Pak- Afghan authorities to streamline issues and create a business -friendly environment within the region.