PAJCCI attended JEC inter-ministerial meeting held by Afghanistan Inter-ministerial Coordination Cell (AICC), chaired by Mohammad Sadiq; Special Envoy for Afghanistan at Islamabad today. The meeting was a prelude to the upcoming Joint Economic Commission meeting between Pakistan & Afghanistan with a wider plan of cooperation between the two countries in diverse fields, including enhancement of trade and economic activities, improved people to people contact, upgrading border infrastructure, investments and joint ventures. At the first Joint Business Council meeting, transit and bilateral trade, free economic zones, a trilateral trade agreement between Pakistan, Afghanistan and Tajikistan, tax & duties, technical assistance to Afghan Customs, and MOU for the banking sector between the two countries were also discussed.
PAJCCI provided technical insights and recommendations to foster trade and economic activity and highlighted pending issues that create obstacles to promoting business and revenue. The SRO to operationalize cross-stuffing is yet to be issued by FBR even after three months. TAD is also approved, but SRO is still pending at the FBR end.
Faiza Zubair, Secretary-General, PAJCCI, informed us that meetings for developing the Barter trade mechanism would take time to grow. It has a unique nature and is not dependent on two items, as in the case of the PAK-Iran agreement. E-Form & EIF requirement must be waived until 31st December 2022, increase PKR trading category items, and encourage PKR trading to reduce pressure on the foreign currency crunch both countries face.
The disparities need to be removed to develop a mutually agreed barter trade mechanism. Government facilitation is required to discuss this with Afghan authorities; like a border crossing, Chaman has no access to E-form & EIF where traders of Baluchistan have to bring them from other provinces. The persisting issues of Sales Tax refund and duty drawback claims in case of the land route and PKR trading is major obstacles to increasing trade volume; SRO shall be issued to address this issue from regulatory authorities on an urgent basis. Processing of third party payments by banks remains the top obstacle for the PAK-AFG business community; the refusal is discriminatory despite amendments by OFAC, whereas other countries are easily using this option without any sanctions. PAJCCI established that new and additional border crossings should be opened with priority, especially “Nawapass”, as it has the necessary infrastructure on both sides to support bilateral transactions of Swat. It was also brought to notice that despite approval Kharlachi border is not operational 24*7, which is needed to relax the congestion on other borders.
To further the trade activity, PAJCCI has held several events by bringing the business community of both sides together and generating huge investment and joint venture interest. Still, so far, no official policy has been announced.
Zubair Motiwala, Chairman of PAJCCI, appreciated the opportunity to represent PAJCCI at the meeting and said that relevant ministries need to issue necessary regulatory orders & devise policies to address all matters creating obstacles. It creates stress and trust deficit in the business community, and Pakistan loses effective and cost-efficient trading near most neighbours. We are not taking advantage of a wide array of trading opportunities in the region. He remarked that other countries as far as the EU are actively trading with Afghanistan and bringing revenue to their country.
The Chair thanked PAJCCI for their deep and practical insights. It issued necessary instructions to hold a meeting next week with the Ministry of Commerce & FBR to address critical issues with PAJCCI at the AICC platform.