Bilateral Trade

Being a landlocked country, Afghanistan depends on its neighbours to help facilitate its bilateral trade and regional trade with the larger global economy. Years of conflict and the lack of governance on these fronts has rendered several problems for the Afghan economy. These include a large undocumented economy, porous borders and trade controls. However, in spite of these barriers to trade, the most recent projections predict a growing economy. This economic growth would mainly stem from Afghanistan’s agricultural sector. While also developing Afghanistan’s economy through bilateral trade in the region. 

Role of Growing Trade in Afghan Peace Process

Additionally, the ongoing Intra-Afghan Peace Dialogue and the pandemic – both set a rather dire backdrop for the economic situation. For Pakistan, peace in Afghanistan means greater security and stability. It is one of the larger regional stakeholders in the Afghan Peace Process. Additionally, Afghanistan offers Pakistan a route to the Central Asian Markets. Pakistan’s warm water ports in reciprocation for the access that Afghanistan can offer to Central Asian Markets. Ultimately, this means that both Pakistan and Afghanistan can improve their economies by Bilateral trade prospects between themselves. It is as some scholars put it “regional peace passes through the promising economic integration between Pakistan and Afghanistan”. 

One instrument that has been used to promote economic integration, is the Afghanistan Pakistan Transit Trade Agreement (APTTA). The APTTA was signed in 2010 to improve trade for Afghanistan, by allowing goods into India through the Wagah Border. More recently, the Transit Trade Agreement was extended for 3 months as preparations for new bilateral trade agreements are made. 

The two brotherly countries have taken measures to improve ties. Pakistan and Afghanistan have initiated several policies to strengthen their bond. However, before these policy initiatives, lies the task to build peace in Afghanistan. The success of the peace talks is crucial to ensuring the success of economic initiatives and bilateral trade. Pakistan continues to exert efforts to help build peace in Afghanistan through diplomatic and developmental efforts. However, it cannot undermine the value that economic initiatives can add to the progress of the Afghan Peace Process. 

Border Porosity; Causing Hindrance in Pak-AfghanTrade

Additionally, trade relations between Pakistan and Afghanistan have always varied. Although, a large amount of undocumented trade keeps the actual situation from being realized. Furthermore, the countries also emphasized the importance of border control. Due to this, efforts to set up border markets are currently underway at the Torkham border. Moreover, post-2014 researches and the recent reports of a decline in Pakistani exports to Afghanistan, highlight how great role accessibility plays in the bilateral trade of the two countries. 

One recent solution to these problems of accessibility has come about in the form of Border Markets. A recent order by Prime Minister Imran Khan launched the construction of border markets. As an initiative of providing employment opportunities and sources of income for the traders and locals in those areas. The authorities are also working to make sure the females also get to participate.

Border Markets: An Initiative to Improving bilateral trade   

However, while border markets will help in providing a platform for joint trade, and help in improving bilateral trade relations between Pakistan and Afghanistan. There is still a greater need to address issues of climate security and finding greater sustainable solutions. A recent world bank report has suggested growth in the Afghan Economy, by 2022. This growth will only be possible if Afghanistan is able to protect the growth of its agrarian sector from the threats of climate change and rising water insecurity. 

Another factor that should be looked into in this regard is the state of infrastructure that leads to the borders and the areas around it. Although China’s OBOR initiative is beginning to include Afghanistan as well, the progress of CPEC has been stalled due to the ongoing pandemic. Hence, infrastructure is also a key factor in increasing the benefit that can be reaped from these border markets. Subsequently, increasing the advantages the countries will achieve through bilateral trade. 

Moreover, improving the infrastructure also means improving border control and streamlining visa processes for Afghans. This will help in addressing issues of porosity at the border while introducing a more efficient means of letting people in and out. Likewise, multiple projects for progress on the border is underway, vis-a-vis the building of a fence on the Durand line. Additionally, it has also introduced some relaxations regarding the duration of visas, which will help further improve bilateral trade. 

Importance of Bilateral Trade in Knowledge Generation

However, one thing that consistently lacks is the research and discourse generated with reference to the topic of bilateral trade in Pak-Afghan relations. In order to improve on this, the governments on both ends should pay more attention to the “non-traditional security” aspects of the border. While border markets and improved border control are a step in the right direction, knowledge creation in this regards should not be left behind. 


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