Afganistan-Pakistan Transit Trade Agreement (APTTA) | IAS Target IAS Target

Afganistan-Pakistan Transit Trade Agreement

The Afghanistan–Pakistan Transit Trade Agreement (APTTA) is a bilateral trade agreement signed in 2010 by Pakistan and Afghanistan that calls for greater facilitation in the movement of goods between the two countries. (APTTA) granted Afghanistan the right to import duty-free goods through Pakistani seaports, though; APTTA didn’t offer Pakistan reciprocal rights to export goods to the then “Soviet Union or Central Asian Republics (after the fall of the USSR)". In 2010, for greater regional connectivity between Central Asia, South Asia, and the Middle East APTTA became a reality.

Provision of 2010-agreement

  • The 2010 APTTA allows for both countries to use each other's airport, roads, railways, and ports for transit trade along designated transit corridors. The agreement does not cover road transport vehicles from any third country, be it from India or any Central Asian country.
  • The signed Agreement permits Afghanistan trucks access to Wagah border with India, where Afghan goods will be offloaded onto Indian trucks, but does not permit Indian goods to be loaded onto trucks for transit back to Afghanistan. Instead, Afghan trucks offloaded at Wagah may return to Afghanistan loaded only with Pakistani, rather than Indian goods, in an attempt to stop the formation of a black market for Indian goods in Pakistan.
  • The Afghanistan-Pakistan Transit Trade Coordination Authority (APTTCA) was created to coordinate the Afghanistan–Pakistan Transit Trade Agreement and meetings are held.
  • The APTTA calls for various measures to counter the smuggling of duty-free goods into both Pakistan and Afghanistan by mandating: tracking devices of goods, banking guarantees, and special bonded carrier licenses for transit trucks, vehicular tracking systems, and container security deposits.
  • The agreement provided Pakistan access to every country bordering Afghanistan, with access to Iran, Tajikistan, Uzbekistan, and Turkmenistan. Pakistani imports and exports are granted permission to enter Afghanistan

Challenges of APTTA

  • Pakistan closed its borders with Afghanistan any time, and used blockades for arm-twisting political circles in Afghanistan.
  • Due to blockade of the border, affect supply and this lead to high prices of commodities
  • Pakistan-Afghanistan relations up-down due to terrorism in the region, so regular blockade of the border affects trade on border.
  • Major problem of Afghanistan of APTTA, that it can't trade with India due to restrictions imposed by Pakistan and hinder bilateral cooperation between two South-Asian countries.
  • Pakistan state that India-Afganistan trade creates a black market of Indian goods in Pakistan, so it keeps vigil and not allow India to upload its goods into Afghanistan.

Implication of APTTA

  • APTTA is surely tilting the power balance, though the likelihood of India replacing Pakistan’s primacy for Afghanistan is constrained by geography.
  • Because of Pakistan obstruction attitude, India is now bypassing Pakistan via Chah Bahar port in Iran.
  • Afghanistan might soon be pulling the strings unilaterally in transit allowances due to Pakistan’s need to access central Asian resources in future.
  • India also started air-transport corridor for trade with Pakistan.