ISLAMABAD: In a significant move to strengthen bilateral economic ties, Pakistan and Afghanistan have signed a Preferential Trade Agreement (PTA) that will significantly reduce tariffs on selected goods traded between the two countries.
The agreement was signed during a ceremony in Islamabad between Afghan Deputy Minister for Commerce and Industry Ahmadullah Zahid and Pakistan’s Commerce Secretary Jawad Paul.
The PTA is designed to reduce trade barriers and facilitate smoother exchange of goods and services. Under the agreement, tariffs on goods traded between the two countries will be lowered from 60% to 27%. The agreement will come into effect from August 1, 2025, and will initially be valid for one year, with the possibility of extension based on mutual satisfaction.
As part of the arrangement, Pakistan will reduce duties on agricultural products from Afghanistan, including grapes, pomegranates, apples, and tomatoes, while Afghanistan will reduce tariffs on mangoes, quinoa, bananas, and potatoes coming from Pakistan.
The signing of this agreement builds on earlier discussions, including an Early Harvest Program (EHP) designed to kick-start trade between the two nations. The EHP will implement preferential tariff concessions on key agricultural goods, with both countries committing to reduce tariffs on a selected list of products. The initiative aims to promote more trade and increase economic cooperation in the region.
Key details of the agreement include:
Preferential Tariff Treatment for agricultural goods under the Early Harvest Program, with goods like tomatoes, grapes, apples, and pomegranates being traded between Afghanistan and potatoes, kinnows, bananas, and mangoes between Pakistan.
The rules of origin specify that the products must be harvested, picked, or gathered in the exporting country and accompanied by a Certificate of Origin.
The agreement will be reviewed and overseen by a PTA Implementation Committee, which will meet monthly to monitor and evaluate the program’s success.
The PTA is seen as a step toward greater economic integration between Pakistan and Afghanistan, providing a more structured framework for increased trade and enhanced cooperation between the neighboring countries. The agreement reflects both nations’ commitment to boosting bilateral ties and promoting regional trade in a mutually beneficial manner.
