MARKET ANALYSIS

EXPORTERS UNCERTAIN ON TRADING WITH AFGHANISTAN

As Afghanistan’s new administration looks to overcome economic instability by normalizing trade relations with its neighbors, questions are being asked regarding the legality of this. A Peshawar based exporter, who regularly deals with Afghanistan, told that the little trade happening between the two countries was legal. All trade is under the Afghanistan-Pakistan Transit Trade Agreement 2010, an agreement which cannot be affected unilaterally and it requires both the country’s consent to end the agreement,” he said. However, another trader requesting anonymity due to security concerns, while talking inquired, “our agreements were with the previously politically elected and recognized government. Now when they do not have a globally accepted setup in Afghanistan, who do you deal with?” Currently, Pakistan exports chicken, cement, fresh vegetables, meat, maize, and other daily commodities to its neighbor. The trade between the two is estimated to be between 2 to 4 billion dollars and some traders state that if the current Taliban setup was legitimized by the globe it could grow to around 10 billion dollars per year. There is a clear policy of the State Bank of Pakistan that importers will have to pay in dollars but since Afghanistan’s dollar accounts are frozen how can we term this trade as legitimate,” the trader questioned. The customs official was of the view that even though Afghanistan’s accounts were frozen, there were no United Nations (UN) trade sanctions on the country so nothing was illegal. “In August or September, I don’t remember the exact dates but Taliban stressed upon deals in local currency until their banking sector developed further and since there were no UN sanctions on them it was mutually agreed to trade in local currency,” the senior official informed.