Business leaders reject Pak-Afghan transit trade pact

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ISLAMABAD – Industrialists and business leaders in Pakistan unanimously rejected the new Pakistan Afghan Transit Trade Agreement (PATTA), saying it will further damage their country’s fragile, terrorism-affected economy.

“We reject this agreement. It is very damaging for the future of Pakistani industries and businesses,” said Riaz Shahid, president of the Khyber Pakhtunkhwa Chamber of Commerce and Industry (KPCCI).

Pakistan, in the agreement, allows for the first time Afghanistan to transport goods across the Wagha border to destinations in India. The agreement allows Pakistan to use Afghan territory to export goods to Central Asia.

“Under the new agreement, Afghanistan will ensure a safe route for Pakistani exports to Central Asian countries,” Ministry of Trade and Commerce spokesman Shahab Khan said. “In the old agreement, (a secure route) was missing.”

Khan defended the agreement.

“I fail to understand why commentators and experts are opposing the new PATTA,” he said. “They (opponents of the agreement) have not properly understood the agreement.”

Industrial Development Corporation Pakhtunkhwa director Ghulam Sarwar Mohmand disagreed.

“We and the business community have serious reservations about the agreement,” said Mohmand, a leading industrialist and expert on Pak-Afghan trade. “Smuggling of transit goods will further increase in Pakistan”.

Goods headed from the Karachi seaport to Afghanistan will be vulnerable on open trucks, he said. “It is impossible for the government to ensure these trucks aren’t opened inside Pakistani territory,” Mohmand said.

Smuggling will skyrocket and industrial enterprises will go out of business due to the government’s inability to protect open trucks en route, Peshawar-based trader and former KPCCI president Sharafat Ali Mubarak said.

“The government signed the agreement in haste under international pressure,” Mubarak said.

Parts of the agreement dealing with exports to Central Asia are vague and confusing, Mohmand said.

“Pakistani exports to the CIS are negligible,” Mohmand said. Pakistan, unlike other countries, has no shared border with the CIS and the chances of boosting Pakistani exports to the CIS via Afghan land routes are slim, he said.

Trade between Pakistan and Central Asian states grew 0.7% from 2007 to 2008, according to available data, reaching US $23.4m ($16.6m of it being Pakistani exports).

Prime Minister Yousuf Raza Gilani responded to media criticism of the pact with a July 21 statement, saying, “No (transit trade) agreement is signed with Afghanistan yet.”

“The prime minister is right,” said Shahab, an official in the commerce ministry. “The trade ministers of both the countries have signed only record notes, not the agreement.”

Pakistan is morally bound to sign the agreement, however. “We (Pakistan) can never back out,” Shahab said.

The deal’s critics don’t know the facts, Pakistani Information Minister Qamar Zaman Kaira said at a hurriedly called news conference.

“We debated modalities of the agreement for four years, and (it) is in the interests of both countries,” Kaira told the media.

The government took all stakeholders – including the business community and political opposition – into its confidence before agreeing to the pact, he said. “It is more in favour of Pakistan,” Kaira said. “Pakistani goods now will be exported safely to Central Asian states via Afghanistan.”

No Indian goods will be exported through Pakistan, he stressed. “Only Afghan goods will be exported, in Afghan trucks, to India,” Kaira said.

Afghan Commerce Minister Anwar ul-Haq-Ahadi had earlier hinted at the possibility of India exporting goods to Afghanistan across the Wagha border crossing in Afghan trucks, but that provision is not part of the pact. Still, business leaders are hesitant to go along with the deal.

“Traders and industrialists are planning big demonstrations and strikes as the government did not accommodate their points in the new agreement,” said Mohmand, an very active member of the trade and industry community.