Afghanistan's Regional Trade Agreement with Neighboring Countries

[Hashmat]

Pakistan and Afghanistan have a long history of being trade partners. Pakistan offers Afghanistan access to a seaport for its foreign trade. Afghanistan, at the same time, provides Pakistan with a direct land route to Central Asia. President Ashraf Ghani, during his presidential campaign promised the Afghan nation if elected he would increase trade and investment with neighboring countries which will ultimately bring peace and stability to Afghanistan. Pakistan is one of the largest trading partners of Afghanistan as it exports goods and services worth approximately $2.5 billion annually and is also the main conduit of imports from elsewhere through the Karachi port.
In your opinion, how important is economic ties of Afghanistan with neighboring countries?
Very respectfully,
Hashmat
Digital Engagement Team, U.S. CENTCOM

[ComradePashtun]

In addition to APTTA here is a new in the coming between Afghanistan, Iran and India.


Ministry Herlads a New Trade Deal with India, Iran


The Ministry of Commerce and Industries (MoCI) announced on Saturday that a trilateral trade and transit agreement is set to be signed between Afghanistan, Iran and India in the near future.

All three countries must still finalize the deal, which is expected to free-up the flow of goods and trade between them.

MoCI officials have said the agreement will allow Afghan trucks to travel to and from Chabahar port, increasing efficiency and cutting down transport time for important goods and vegetables that would have previously been brought through Pakistan. Officials have also said airlines will begin routes to Chabahar port, which lies in the south, just across the Iranian border.

"The trilateral agreement is to expand trade and transit. Iran sent their ideas about it last week, so this agreement will be signed soon," MoCI transit director Muhammad Yahya Akhlaqi said. "We hope that with the signing of this agreement, our trucks will be able to go directly to Chabahar port, without any Iranian company partner. In the past, our trucks needed to be accompanied by Iranian companies."

The trade agreement comes at a crucial time for the Afghan economy, which faces high unemployment, government budget shortfalls and stagnant growth overall. Analysts have applauded the pending deal as a major step in the right direction for international trade ties, but have warned about its political implications as Afghanistan has relied on Pakistan's trade routes for most of the past.

"Chabahar route is way more beneficial for our trade and transit relations with India and Iran," Chamber of Commerce and Industries Deputy Chair Muhammad Younus Mohmand told TOLOnews. "The Government must finalize this agreement as soon as possible, so that we can expand our trade relations with these two countries."

Afghan officials have assured the public that the terms of the agreement are strict, allowing Afghan trucks to go to Chabahar port even if they have no bank guarantees, high transit fees and insurance.

http://www.tolonews.com/en/business/19440-ministry-heralds-new-trade-deal-with-india-iran

[ComradePashtun]

$200 Million Indian Investment in Chahbahar Port Announced

Officials at the Ministry of Commerce and Industries (MoCI) on Thursday touted a new $200 million USD Indian investment for developing Iran's Chabahar port. The opening of the port to Afghan commerce is expected to improve direct trade between Afghanistan and India as well as open up new revenue streams associated with the flow of Indian goods through Afghanistan into Central Asia.

Based on an agreement signed between Iran and India on Wednesday, in addition to New Delhi's investment in developing modern trade and commerce infrastructure at Chabahar port, a new shipping route will be established for trade between India and Afghanistan.

Afghan officials have not shied away from acknowledging the Chabahar port project as a direct competitive challenge to Pakistan by India. "The Chabahar port offers India the nearest route to access Central Asian countries compared to Pakistan's Gawadar and Karachi ports," MoCI Transit Department head Syed Yahya Akhlaqi said. "Undoubtedly, this route also benefits Afghanistan by getting access to Indian markets."

Independent economists have urged the Afghan government to leverage India and Pakistan's mutual eagerness for access to Central Asian markets as an opportunity to develop Afghanistan's infrastructure.

Many of Afghanistan's highways require urgent repair and better security, as deficiencies in both have impeded economic growth and made everyday life many Afghans more difficult.

"Afghanistan's basic infrastructure and highways must be developed so that the country gains an advantage as Iran and India are," Transit and Transportation Union head Abbas Ayeen told TOLOnews. http://www.tolonews.com/en/business/...port-announced

[ComradePashtun]

This will bring in dynamism and competition which is always good for market stability and in favor of consumers, especially when Afghanistan does't even produce 20% of what it consumes. It will benefit its exports as well, having two to compete than relying one is better. Market dynamism and competition has a positive impact on poverty reduction which is rampant in Afghanistan.

[ComradePashtun]

On the other hand Afghanistan's economy is more integrated with Pakistan, and close cultural ties could serve as the basis for economic opportunities and two-way benefits in every sector. Afghanistan needs willing partners.

[Insight]

In fact, Pakistan has offered inferior access to its ports in Karachi. Afghanistan does not get much access at all. Also, Pakistan has a habit of shutting down the trade routes as punishment. This has happened on several occasions in the past few years. The Kabul puppet regime then begs the Pak military to open up the routes.


This is about to change as China takes full control of Gwadar port, and Pakistan will have zero say on who China offers free trade to at the port.Thats the whole purpose of China taking control of the port (they are looking at forwarding their financial interests) An independent Afghan government would in theory benefit the most from Chinese control of Gwadar (which will last 40+ years). A win-win scenario.

Iran also has a habit of closing trade routes, and this is also documented on several cases. However, again with Chinese Silk Road initiative, none of these nations will dare close the future Silk Road routes because they all fear China. China's control of a major water port is the reason.