ISLAMIC CITY: Officials from the Ministry of Commerce in this country have stated that Pakistan and Afghanistan have signed a Preferential Trade Agreement (PTA) that reduces tariffs on each other’s goods.
Mulla Ahmadullah Zahid, the Deputy Minister of Commerce and Industry in Afghanistan, and Jawad Paul, Secretary of Commerce for Pakistan, signed the deal on Wednesday in Islamabad.
PTA was a trade agreement between two or more countries that lowered or eliminated tariffs and other trade barriers for goods and services.
The tax rates between the two countries will drop from 60% to 27%.
Following the signing of the Preferential Trade Agreement, Pakistan and Afghanistan reduced tariffs to 27%.
The one-year deal will go into effect on August 1.
The agreement will lower tariffs on a total of eight agricultural items.
Development is considered a “win for farmers and traders” by the Afghan delegation.
Officials in the Commerce Ministry said that the federal cabinet will approve the deal. It will start on August 1, 2025, and initially last for one year.
If both sides agree, officials say they can extend the preferential deal.
Pakistan will reduce its taxes on Afghan-sourced mangoes, kinnows, bananas, and potatoes. Additionally, Afghanistan will lower its taxes on Pakistani-sourced apples, pomegranates, grapes, and tomatoes.
Pakistan and Afghanistan have also agreed to establish a technical committee that will work on a trade deal facilitating the passage of goods between the two countries.
Dawn spoke with a top official at the Ministry of Commerce, who stated that the agreement will mark the beginning of formal PTA talks that have been on hold for almost ten years.
The official also said, “We will now resume talks to discuss the details of the PTA.”
Both countries agreed to start PTA talks in 2014, and Pakistan then shared a draft deal.
However, when Afghanistan’s President Ashraf Ghani declared that further talks would only take place if India could import goods through the Wagah border, progress stalled. Islamabad twice turned down this offer.
Consequently, the Ministry of Commerce put the talks on hold for several years.
In the meantime, Pakistan has taken several steps to facilitate trade between the two countries. The agreement now acknowledges transactions in Pakistani rupees and permits some barter trade to tackle Afghanistan’s banking issues.
Pakistan’s exports to Afghanistan officially increased from $558.03 million in FY24 to $773.89 million in FY25, representing a 38.68% rise.
From FY24 to FY25, imports from Afghanistan more than doubled, increasing from $11.96 million to $25.89 million, a 116.47% rise.
Sugar has been Pakistan’s main product in Afghanistan this year. In the last four months alone, over 700,000 tons have been sent.