Pakistan, Uzbekistan Trade Goods Via Afghanistan In Landmark First
By Frud Bezhan May 26, 2021
Pakistan and Uzbekistan have exchanged goods through war-torn Afghanistan for the first time, in a move hailed as a milestone for regional economic integration.
A Pakistani cargo truck on May 4 transported medicine from the port city of Karachi to the Uzbek capital, Tashkent, via Kabul. An Uzbek cargo truck then took a shipment of leather products from Tashkent to the Pakistani city of Faisalabad on May 13.
The shipments are part of five planned trial runs aimed at testing the viability of various routes in the region, where trade has been hampered by the decades-old conflict in Afghanistan and longstanding diplomatic tensions between Kabul and Islamabad.
The project has received technical and financial support from the United States Agency for International Development (USAID). The agency said the initiative is intended to "boost regional trade integration and connectivity."
The shipments were made under the Transports Internationaux Routiers (TIR) Convention, a customs agreement that facilitates the international transport of goods. The multilateral treaty eliminates the need to pay customs duties and taxes. Afghanistan rejoined the TIR after a 30-year suspension in 2013, while Pakistan joined in 2017.
William Byrd, a development economist at the United States Institute of Peace, a Washington-based think tank, says the pilot project is an "encouraging development" but "more a proof of concept than a milestone."
"If this gets taken forward by expanding to other Central Asian countries and is scaled up over time in terms of the volume of transit trade, there will be important benefits for both Pakistan and Central Asia," says Byrd. "If this transit trade develops on a larger scale, it will also increase the economic stakes of neighboring countries in Afghanistan's peace and stability."
Afghanistan's neighbors have a long history of funding proxy groups in the decades-long conflict. Pakistan is the Taliban's main foreign backer, while Iran and Russia have expanded ties with the militant group in recent years.
'New Trade Era'
Abdul Razak Dawood, Pakistani Prime Minister Imran Khan's adviser on commerce and investment, says the pilot project has been "very successful."
"Our objective is to have greater connectivity with our western and northern neighbors," Dawood told RFE/RL's Radio Mashaal. "So, we are very encouraged. We want to do more [trade]."
Dawood said Islamabad expects to sign preferential trade arrangements (PTAs) -- which could include lower or even no tariffs -- with Uzbekistan and Afghanistan in the coming months.
Pakistan has been dealing with a struggling economy and energy crisis for years and has long sought access to markets in resource-rich Central Asia.
Pakistani media reports said Islamabad wants to import more Uzbek goods, including coal, fertilizers, and textiles.
The Pakistani transport company Best Trans Pvt and Uzbek freight-forwarding company Asad Trans -- the two firms involved in the project -- plan to boost the number of trucks carrying cargo to Pakistan and Uzbekistan to 50 by the end of the year.
Insecurity A 'Severe Hurdle'
Observers say the biggest hurdle for regional economic connectivity is the war in Afghanistan, where violence has intensified since the announcement last month that U.S. and other Western forces would be withdrawing.
There are widespread fears of an intensified civil war if the Taliban attempts a forcible takeover of the country following the foreign troops' complete withdrawal, which is due by September 11.
It is unclear if the Taliban gave its backing to the Pakistan and Uzbekistan cargo route, which passes through territory controlled by the militant group. The Taliban commands or contests around half of Afghanistan.
"If insecurity worsens and violence further escalates in the wake of the U.S. troop withdrawal, that could become the most severe hurdle both for economic activity in Afghanistan more generally and for regional connectivity," says Byrd.
Byrd says other hindrances to greater regional trade include widespread corruption at border crossings in the region as well as numerous checkpoints on Afghan highways where various powerholders extort fees from transporters.
Foad Ahmadi, the spokesman for the Industry and Commerce Ministry, told RFE/RL's Radio Free Afghanistan that the cargo route between Pakistan and Uzbekistan will allow Afghanistan to become a "roundabout" for regional trade.
Afghan President Ashraf Ghani has repeatedly talked up his country's potential as a "hub of regional connectivity."
But experts say the pilot project offers fewer tangible benefits to landlocked Afghanistan.
"For Afghanistan it is crucial to develop its own economy, including in particular agro-processing, construction, and, over a longer period, mineral extraction and exports that are currently subject to widespread informal mining and smuggling out to Pakistan and Iran," says Byrd. "On the export side, Afghan products need to be permitted to transit more seamlessly through neighboring countries, notably Pakistan."
Pakistan has banned Afghanistan from transporting goods through its territory to India, Islamabad's archrival.
In response, New Delhi and Kabul launched an air freight corridor in 2016 to provide greater access for Afghan goods to the Indian market.
New Delhi, Kabul, and Tehran have also established a trade route through Iran's strategic Chabahar Port.
The trade route has lessened Afghanistan's reliance on Pakistan and has allowed India to open a sea route to Afghanistan. New Delhi also gained access to natural resources in the Central Asian republics.
As a result, Afghanistan's trade with Pakistan has plummeted in recent years as Iran has become Afghanistan's biggest trading partner.
Landlocked Uzbekistan would one of the biggest beneficiaries of greater regional trade.
Uzbekistan's access to marine shipping is very limited, and Tashkent has sought to secure a direct link to seaports in Pakistan and Iran.
In February, Afghan, Pakistani, and Uzbek officials signed a road map on the construction of a railroad from Afghanistan's northern city of Mazar-e Sharif, near the Uzbek border, to Kabul and the northwestern Pakistani city of Peshawar.
Tashkent has signed a flurry of agreements with its southern neighbors to enhance regional trade. But Uzbek companies says many hurdles remain.
The head of an Uzbek transport and logistics company, speaking on condition of anonymity, told RFE/RL's Uzbek Service that the Pakistan-Uzbekistan route was an opportunity for Tashkent and Islamabad to "score political points."
"In fact, Uzbekistan does not have any intergovernmental agreements on the acceptance, registration, and dispatch of goods with either Pakistan or Afghanistan," he said. "When we address the Transport Ministry about these issues, officials always tell us the same thing: 'We are working on it.'"
Copyright (c) 2021. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.
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