Pakistan and Afghanistan Sign Preferential Trade Agreement

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

The agreement was officially endorsed at a ceremony in Islamabad, with Afghan Deputy Minister for Commerce and Industry, Ahmadullah Zahid, and Pakistan’s Commerce Secretary, Jawad Paul, representing their respective countries.

A PTA is a commercial accord between two or more nations that agree to ease or eliminate tariffs and other obstacles to commerce for specific goods and services exchanged between them.

According to the terms of the agreement, both countries have consented to decrease tariff rates from 60% to 27%.

Reports indicate that this measure is designed to stimulate bilateral trade and strengthen economic collaboration within the region. The agreement is scheduled to take effect on August 1, 2025, and will initially remain in force for a year.

The agreement outlines that Pakistan will diminish duties on grapes, pomegranates, apples, and tomatoes imported from Afghanistan. Conversely, Afghanistan will lower tariffs on mangoes, quinoa, bananas, and potatoes originating from Pakistan.

Previously, it was reported that the proposed PTA draft emphasizes the importance of facilitating trade between Afghanistan and Pakistan. The Ministry of Industry and Commerce of Afghanistan (MoIC) and the Ministry of Commerce of Pakistan (MoC) are committed to implementing an Early Harvest Programme (EHP) to bolster trade and economic partnership.

Key Articles of the Agreement
  • Article 1: Preferential Tariff Treatment: Both parties will provide preferential tariff concessions on a selected list of agricultural goods under the Early Harvest Program.
  • Article 2: Development of Preferential Trade Agreement (PTA): The Contracting Parties agree to initiate negotiations for a comprehensive Preferential Trade Agreement (PTA) based on the performance of the Early Harvest Program and mutual satisfaction of both sides.
  • Article 3: Rules of Origin: The agricultural products listed above 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 shall be issued by the Trade Development Authority of Pakistan (TDAP); and for Afghanistan, the Certificate of Origin shall be issued by the Ministry of Industry and Commerce (MoIC).
  • Article 5: Implementation Date: The Early Harvest Program shall be implemented starting 1st August 2025.
  • Article 6: Duration and Reciprocity: The tariff concessions shall be granted for a period of one year, from 1st August 2025 to 31st July 2026. The program may be extended upon mutual agreement; and all concessions are to be based on reciprocity and parity.
  • Article 7: PTA Implementation Committee: A PTA Implementation Committee shall be formed to oversee the Early Harvest Program, led by MoIC (Afghanistan) and MoC (Pakistan), including representatives from Customs and Agriculture Ministries of both countries, meet on a monthly basis, and be responsible for monitoring, evaluation, and recommending improvements to the programme.