ISLAMABAD: Pakistan has asked Afghanistan to resume trade talks after Kabul called off three key trade meetings over the past few months, leading to complete silence on bilateral trade issues.

“We have conveyed to Afghanistan that we wish to keep India out of our bilateral talks on trade and transit issues,” an official source in Pakistan’s commerce ministry told Dawn.

The official, who participated in several rounds of trade talks with Kabul, said the message had been passed on to the Afghan leadership. Afghanistan’s proposal to include India in talks led to the suspension of bilateral trade talks, the source added.

During the last visit of Pakistan’s high-level technical delegation to Afghanistan, Afghan President Ashraf Ghani informed that Kabul was not willing to talk to Pakistan on trade issues — including the trilateral trade agreement involving Pakistan, Afghanistan and Tajikistan — without India.

According to the source, Kabul has suspended talks on Afghanistan, Pakistan Transit Trade Coordination Authority (APTTCA). The meeting was scheduled to be convened in Kabul to review the implementation status of the agreement.

Pakistan and Afghanistan have constituted a joint business council to promote trade and business. Both sides have already exchanged the list of members of the business council, whose first meeting was to be convened in Islamabad but Kabul did not agree on a date, the source said.

“We had good interaction with many ministers in Afghanistan but things changed in the meeting with the Afghan president,” the source said, adding, “We returned disappointed from Kabul.”

Several efforts were made to revive the talks, the official said. “We want to move from suspicion to facilitation on trade with Afghanistan.”

Both sides have also projected to double bilateral trade to $5 billion from current $2.5bn in the next three years.

Exports to Afghanistan are steadily declining, mainly because Pakistan’s Ministry of Commerce has amended the export regime for trade with the neighbouring country. Under the changed export regime, exporters have already switched over from the rupee to the dollar since March 2014.

On demand from fruit and vegetable exporters, the government has revived exports of these perishable products to Afghanistan in rupee terms in the budget 2015-16.

The change in the export regime has been made after almost 12 years as eight-fold increase was witnessed in Pakistan’s export proceeds to Afghanistan between 2002 and 2014.

It seems that the government did not consider the increase in export proceeds before making a final decision. Experts said that proper work was not done on this proposal except a recommendation from the Khyber Pakhtunkhwa Chamber of Commerce and Industry that wanted to change the regime from the rupee to the dollar.

Pakistan’s exports to Afghanistan rose marginally to $2.5bn in 2014-15 from $2.249bn in 2011-12. They were $1.11bn in 2005-06.

In 2002, the then government decided to facilitate exporters and get more market for Pakistani products in Afghanistan. As a result, SRO31 of 2002 was issued to allow exports against the rupee. Exports to Afghanistan stood at $386.67 million in 2002-03.

Statistics of exports proceeds suggest that Afghanistan has emerged as the second largest export destination for Pakistan after the United States.

Published in Dawn, September 6th, 2015

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