TDAP proposes lowering cost of trade with Afghanistan

KARACHI: The Trade Development Authority of Pakistan (TDAP) has proposed to reduce cost of doing business trade with the target market for securing better access to Afghanistan.

The major concern raised by stakeholders is the increasing cost of doing transit as well as bilateral trade with Afghanistan in contrast to other alternatives like Iran, which offers many facilities from handling of consignments to onward transportation at competitive rates, whereas in Pakistan these costs have increased substantially over the years.

Moreover, high cost of transportation and hefty deposits by shipping companies for transportation containers is discouraging Afghan importers to deal with Pakistan.

TDAP in a report noted that during last couple of years certain elements severely affected Pakistan export momentum to Afghanistan which country had gained for 6 years since 2009-10.

“Besides high cost of doing business, the non-availability of leveled business playing field to Pakistan’ business community and investors to market their products and services in Afghanistan due to the deteriorated bilateral relations resulted in substantial decline in Pakistan’s exports to Afghanistan,” the report noted adding the issue of bilateral relations needs to be taken up at government level.

During first three quarters of 2019, there remained significant downward trend in Pakistan’s exports to Afghanistan. However, in the 4th quarter, exports picked up to $299.179 million as compared to $234.673 of the same period of year 2018.

“One of the major reasons of inability to increase our share in Afghanistan market is our reliance on food commodities and non-value added export to this market. 80 percent of our export remained of non-value added items including wheat, sugar, fruits, vegetables and cement etc,” TDAP report observed.

“Any supply and production issue to anyone of these commodities result into substantial decrease in our export figures to Afghanistan vis-à-vis our competitors including Iran, Kazakhstan, India etc. On the other hand, China, being supplier of value-added goods to this market is becoming the leading competitor and taking over the lion share of the market”.

The pending bilateral trade and economic institutional talks have also affected trade and social ties in recent past. “This needs continued pursuance with Afghan side on all forums,” TDAP said.

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