Pakistan and Afghanistan Sign Preferential Trade Agreement

In a significant economic move, Pakistan and Afghanistan have formalized a Preferential Trade Agreement (PTA) aimed at substantially lowering tariffs on imports from both nations. This development was reported on Wednesday.

The agreement was officially signed during a ceremony in Islamabad. Representing Afghanistan was Deputy Minister for Commerce and Industry Ahmadullah Zahid, while Pakistan was represented by Commerce Secretary Jawad Paul.

A PTA is a trade accord wherein participating countries commit to decreasing or eliminating tariffs and other trade obstacles on specific goods and services traded among them.

Under the terms of this agreement, both Pakistan and Afghanistan have consented to reduce tariff rates, bringing them down from 60% to 27%.

Reports indicate that this initiative is designed to stimulate bilateral trade and enhance economic collaboration within the region. The agreement is scheduled to take effect on August 1, 2025, with an initial duration of one year.

According to the agreement, Pakistan will decrease duties on imports of grapes, pomegranates, apples, and tomatoes from Afghanistan. In return, Afghanistan will lower tariffs on imports of mangoes, quinoa, bananas, and potatoes from Pakistan.

Previously, it was reported that the proposed draft PTA underscores the importance of facilitating trade between Afghanistan and Pakistan. Both the Ministry of Industry and Commerce of Afghanistan (MoIC) and the Ministry of Commerce of Pakistan (MoC) have agreed to implement an Early Harvest Programme (EHP) to boost trade and economic cooperation.

Key Articles of the Agreement:
Article 1: Preferential Tariff Treatment:
  • The involved parties, namely Afghanistan and Pakistan, will provide preferential tariff concessions on a select list of agricultural goods under the Early Harvest Program.
  • These concessions will be implemented by reducing tariffs and duties on specific products originating from each country and destined for the other. Afghanistan will export tomatoes, grapes, apples, and pomegranates, while Pakistan will export potatoes, kinnows, bananas, and mangoes.
Article 2: Development of Preferential Trade Agreement (PTA):

Both parties agree to commence negotiations for a comprehensive PTA based on the performance of the Early Harvest Program and the mutual satisfaction of both sides.

Article 3: Rules of Origin:

The agricultural products listed must be harvested, picked, or gathered in the exporting country, wholly obtained, and accompanied by a Certificate of Origin issued by the designated authority of each country to qualify for preferential treatment.

Article 4: Certification:
  • For Pakistan, the Certificate of Origin will be issued by the Trade Development Authority of Pakistan (TDAP).
  • For Afghanistan, the Certificate of Origin will be issued by the Ministry of Industry and Commerce (MoIC).
Article 5: Implementation Date:

The Early Harvest Program will be implemented starting August 1, 2025.

Article 6: Duration and Reciprocity:
  • The tariff concessions will be granted for one year, from August 1, 2025, to July 31, 2026.
  • The program may be extended upon mutual agreement.
  • All concessions are based on reciprocity and parity.
Article 7: PTA Implementation Committee:

A PTA Implementation Committee will be formed to oversee the Early Harvest Program. It will:

  • Be led by MoIC (Afghanistan) and MoC (Pakistan).
  • Include representatives from Customs and Agriculture Ministries of both countries.
  • Meet monthly.
  • Be responsible for monitoring, evaluation, and recommending improvements to the program.