Trade Chamber welcomes preferential pact with Kabul but flags persistent barriers

The Pakistan-Afghanistan Joint Chamber of Commerce and Industry (PAJCCI) has welcomed the signing of a preferential trade agreement (PTA) between Islamabad and Kabul but expressed concern over ongoing obstacles hampering bilateral and transit trade.

The agreement, formalized earlier this week by Pakistan’s Commerce Secretary Jawad Paul and Afghanistan’s Deputy Minister of Industry and Commerce Mullah Ahmadullah Zahid, reduces tariffs on key agricultural exports.

Under the new terms, duties on Afghan grapes, pomegranates, apples, and tomatoes — as well as Pakistani mangoes, oranges, bananas, and potatoes — have been slashed from over 60% to 27%, with a further reduced 22% rate for tomatoes and potatoes.

“This progress builds on discussions held during the Special Investment Facilitation Council (SIFC) meeting on December 17, 2024,” PAJCCI Chairman Muhammad Zubair Motiwala said in a statement Saturday.

“This milestone reflects our longstanding demands, pursued through consistent efforts and reinforced during the SIFC meeting, marking a significant step towards enhancing trade,” he said.

However, despite the agreement, PAJCCI President Junaid Makda warned that structural and regulatory hurdles continue to undermine trade potential. He noted that bilateral and transit trade volumes have plummeted from a peak of $2.5 billion to just $1.2 billion in 2024, The Express Tribune reported.

“As outlined in our recent letter to Interior Minister Mohsin Naqvi, these issues include the lack of a consistent, long-term trade policy from the Ministry of Commerce and the State Bank of Pakistan, creating uncertainty among traders and discouraging investment,” Makda said.

He added that payment disputes — fueled by banking limitations — have triggered unwarranted scrutiny by the Federal Investigation Agency (FIA), further eroding traders’ confidence. The temporary nature of Electronic Import Form (EIF) waivers also complicates planning and logistics for businesses engaged in cross-border commerce.

The chamber also criticized delays in visa issuance for Afghan businessmen, calling for a streamlined process to facilitate greater economic engagement.

In addition, the chamber raised concerns over the 1% infrastructure development levy imposed by the Khyber Pakhtunkhwa government. While the rate has been reduced, PAJCCI argues it still burdens transit trade and contravenes Pakistan’s international trade commitments.

The chamber warned that such fees are driving some trade to alternative routes such as Iran’s Chahbahar port, undermining Pakistan’s regional competitiveness, Dawn News reported.

PAJCCI urged the federal government to implement systemic reforms to eliminate policy inconsistencies and operational inefficiencies that continue to stifle trade growth between the two neighboring countries.