Bridges Weekly Trade News Digest • Volume 13 • Number 1 • 14th January 2009
Afghanistan, Pakistan Pledge Cooperation on Trade
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In his first visit to Kabul since taking office in September, Pakistan President Asif Ali Zardari met with Afghanistan President Hamid Karzai on 6 January to discuss issues of national security, narcotics trafficking, and international trade.
Signing a joint declaration entitled “Directions of Bilateral Cooperation,” Pakistan and Afghanistan agreed to promote bilateral trade on preferential terms and to work expeditiously towards full implementation of the South Asia Free Trade Agreement (SAFTA) and Economic Cooperation Organisation Trade Agreement (ECOTA).
Created in 2006, SAFTA aims to reduce barriers to trade among the eight members of the South Asian Association for Regional Cooperation (SAARC), with a goal of eventually eliminating tariffs on goods travelling between contracting states. But implementation of the agreement has been slow, impeded by various political, economic and military disputes between members.
For Islamabad and Kabul last week’s meeting marks the latest exchange in what has been seen as a developing stance of cooperation and dialogue between the occasionally contentious neighbouring states.
The declaration pledged both nations to maintain frequent exchanges of high-level visits and contacts between government departments, parliaments, armed forces and security agencies to enhance mutual understanding in all fields.
“Afghanistan and Pakistan have a new relationship,” Karzai told a joint press conference.
With increased communication and coordination, both nations hope to mutually benefit in terms of economic development, and to enhance their ability to meet mutual security concerns, which was a central focus of the meeting.
“We intend to work towards a better tomorrow. We want to tell the world today, together standing shoulder to shoulder, that we are together in this fight against these non-state actors who have taken nations, countries and in fact superpowers to war,” Zardari told reporters.
The declaration also included a commitment of both nations to improve transit and communication infrastructure, increasing connectivity between the countries and the region.
Although the nations have provided some mutual access with the Afghanistan Transit Trade Agreement (ATTA), the 1965 treaty is viewed by many as outdated and unsuited to current market realities. As such, the ATTA is being updated in the form of the new Afghanistan Pakistan Transit Agreement (APTA), currently under completion. This new agreement seeks to slash trade barriers between the two countries, nearly eliminating duties and taxes on Pakistani and Afghani goods in transit.
Such improvements as those envisioned by the Joint Declaration and APTA could provide landlocked Afghanistan with greater access to the Persian Gulf and Arabian Sea, particularly the Gwadar deep-sea port, which opened last year. For Pakistan, improved Afghan infrastructure means greater accessibility to trade with Central Asian nations.
ICTSD Reporting; “Zardari, Karzai pledge improved ties,” Daily Times (Pakistan), 8 January 2009; “Karzai sees new era with Pakistan,” BBC, 6 January 2009; “President’s first official visit: Pakistan, Afghanistan to ink new trade agreements,” Daily Times (Pakistan), 27 December 2008.
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