Bilateral Trade Agreement | Editorial

Bilateral Trade Agreement | Editorial

Pakistan and Afghanistan have penned an agreement to facilitate bilateral trade, especially when it comes to the use of coal in power generation to make up for the shortfall in electricity production in the wake of the high cost of furnace oil in the international market. Coal was already being imported in small quantities for power generation via the Chaman border station in Balochistan. Under this new agreement, coal imports will start at custom stations in Kharlachi and Ghulam Khan in Khyber Pakhtunkhwa.

According to reports, the coal will be used for power production at two plants—Hubco and Sahiwal plants. This is a positive development as it will help Pakistan significantly with addressing its energy woes as coal will be transported through trucks via land routes. These decisions were reached during the three-day visit (July 18-20) of a Pakistan trade delegation to Kabul where mutual actions for enhancing bilateral trade, transit, and connectivity were discussed. It is good to see mutually beneficial arrangements being agreed upon considering how Pakistan has already turned into a net importer from Afghanistan since the Taliban took control of Kabul in August 2021.

In return, Islamabad has offered a number of facilitation measures to promote imports from Afghanistan. One of the major demands from Kabul was for duty-free imports from Afghanistan, particularly of food items, to help combat rising food inflation. During the meetings between the two sides, it was also agreed that border crossing points will be made more efficient to ensure early clearance of trade and transit traffic and to address the bottlenecks and impediments on a priority basis. In addition to this, a Temporary Admission Document (TAD) will also be implemented which will allow free movement of bilateral trade vehicles and prevent the loading and unloading of goods at the border crossing points with the view to further increasing trade between the two countries.

This is a win-win arrangement for both sides given how the global economy has been suffering due to the impact of the Russia-Ukraine war. At this point, Afghanistan’s coal trade market is one of its biggest revenue resources, which is running an economic cycle benefitting the common Afghans from miners to transporters. The coal export has helped the Afghan government to generate revenue, which is critical given the deep crisis the country finds itself in. This momentum must be sustained and should be further strengthened in a manner that is mutually beneficial for both the countries.

Bilateral Trade Agreement | Editorial


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