One step forward and two steps backwards. President Ghani met a Pakistan delegation in Kabul led by Gen Bajwa on 01 October. A week later, Afghanistan has cancelled a scheduled meeting of the Afghanistan-Pakistan Transit Trade Coordination Authority. Pakistan has responded negatively to this, blaming both Afghanistan and India for scuttling the Af-Pak bilateral trade.
The Afghanistan Pakistan Transit Trade Agreement signed in 2010 (perhaps under pressure from the US), has been strained since the beginning. Pakistan blames Kabul (and New Delhi) for demanding the inclusion of India into the agreement as the primary reason for the failure; however, there are serious internal issues that Pakistan has to address bilaterally.
The failure to control the informal trade (outside the formal channels) between the two countries is the primary reason behind the failure of formal trade between the two countries. Informal trade (like in the case of India and Bangladesh) between Afghanistan and Pakistan thrives and is controlled primarily by businessmen and mafia from Pakistan. Smuggling feeds directly into the various Bara from Peshawar to Karachi. This network has a strong clout over the formal channels and is a primary factor to undermine any bilateral legal trade between the two countries. Reports would suggest that the intelligence agencies are aware of the problem, but ignore it; some would suggest collusion.
Outside the smuggling, and the hold of informal trade over the formal one, there are serious legal issues in implementing the Agreement – from banking to visa procedures for the Afghan businessmen. During the recent years, businessmen from both sides of the border have been regularly threatening to stop the trade, unless their genuine demands and grievances are met.
Pakistan would want not want to look into the real issues for the failure of the formal trade with Afghanistan. Blaming Kabul and New Delhi is an easier option, to take solid measures. Let Islamabad take measures to stop smuggling and the back end links of those Bara markets existing all over Pakistan.