Trade in goods smuggled into Pakistan was once an important source of revenue for Afghanistan. Official Pakistani goods imported into Afghanistan under the 1965 Afghanistan Transit Trade Agreement were often immediately smuggled back into Pakistan through the porous border that the two countries share, often with the help of corrupt officials. [5] In addition to the illegal shipment of goods to Pakistan, goods destined for Afghanistan were often unloaded prematurely from trucks and smuggled into Pakistani markets without paying the necessary customs duties. [6] [7] This led to the creation of a thriving black market, where much of the illegal trade took place openly, as was common in peshawar`s bustling Karkhano market, which was widely regarded as a smugglers` bazaar. [8] In 2003, Pakistan cracked down on the types of goods that could be transported duty-free and introduced strict measures and markings to prevent smuggling. Iran`s diversion of goods from the Persian Gulf has increased significantly, leading to a sharp drop in smuggled goods to Pakistani markets. The 2003 measures led to a drastic reduction in the number of undocumented jobs related to the transit and sale of contraband goods; Jobs and income have also helped fuel the two countries` underground economy, which is often closely linked to drug cartels. The Pakistani government remained frustrated by Afghanistan`s refusal to allow Pakistani products access to Central Asian markets until Afghan exports had reciprocal access to Indian markets. Due to this frustration and the ongoing construction of road projects to China under the China-Pakistan Economic Corridor, the Pakistani government signalled in February 2016 its intention to completely bypass Afghanistan in its quest for access to Central Asia by announcing its intention to revive the quadrilateral transit agreement so that Central Asian states can reach Pakistani ports via Kashgar instead of Afghanistan. [37] This will allow Central Asian republics to access Pakistan`s deep-water ports without having to rely on a politically unstable Afghanistan as a transit corridor.

However, the AQQ would not grant Pakistan access to Turkmenistan and Iran into Afghan territory, as APTTA does. The Afghanistan-Pakistan Transit Trade Agreement (also known as APTTA) is a bilateral trade agreement signed by Pakistan and Afghanistan in 2010 that calls for greater facilitation of the movement of goods between the two countries. Afghan trucks must enter Pakistan through the border crossings of Torkham, Ghulam Khan and Shaman to transport Afghan goods through Pakistani territory and import goods from the Pakistani ports of Karachi, Port Qasim and Gwadar. [15] The signed agreement allows Afghan trucks to enter Wagah`s border with India, where Afghan goods are unloaded onto Indian trucks, but Indian goods are not loaded onto trucks for return to Afghanistan. [16] AtTA has not granted Pakistan reciprocal duties to export goods to neighbouring countries via Afghan territory. Pakistani attempts to gain access to Central Asian markers were thwarted by political instability in Afghanistan that had persisted since the late 1970s. As Afghanistan became increasingly dangerous as a transit corridor, China, Pakistan, Kazakhstan and Kyrgyzstan developed a separate treaty called the Quadrilateral Transit Traffic Agreement (QQA) in 1995 and signed the treaty in 2004. [9] Despite the signing of the AQQ, the full potential of the agreements was never exhausted, largely due to poor infrastructure links between the four countries. In July 2012, Afghanistan and Pakistan agreed to extend APTTA to Tajikistan, which will be the first step towards the establishment of a North-South trade corridor. The proposed agreement will give Tajikistan the opportunity to use Pakistan`s ports and border for imports and exports, while Pakistan would be granted the right to transport goods through Tajik territory to Kyrgyzstan and Uzbekistan. [32] While Afghan importers and exporters have full access to Pakistani seaports under APTTA, Afghanistan has claimed that Pakistani officials often delay deliveries and cause unnecessary delays[31], particularly after the NATO attack on Pakistan in 2011. In November 2010, the two states formed a joint chamber of commerce to expand trade relations and solve traders` problems in this and other areas.

[6] [7] The 2010 APTTA allows both countries to use each other`s airports, railways, roads and ports for transit trade along designated transit corridors. The Agreement does not apply to road vehicles from third countries, whether they come from India or a Central Asian country. [14] The United States stressed the importance of a revised transit agreement between Pakistan and Afghanistan to revive the trade route along the ancient Silk Road between South Asia, Central Asia and the Middle East. [10] Due to the shortcomings of the ATTA, a new treaty between Afghanistan and Pakistan was needed to allow Afghanistan access to Indian markets and Pakistan to mutually access Central Asian markets via Afghanistan – which was much more stable until 2010 than in the previous 20 years. In early March 2016, the Afghan government reportedly gave in to Pakistani demands to use Afghanistan as a corridor to Tajikistan after abandoning requests for reciprocal access to India via Pakistan. [38] The revised Transit Trade Agreement is expected to be signed by April 2016. [39] APTTA calls for various measures to combat the smuggling of duty-free goods in Pakistan and Afghanistan by requiring: cargo tracking devices, bank guarantees and special licenses for guaranteed carriers for transit trucks, vehicle tracking systems and container depots. [20] Implementation of the treaty has been mixed, with both sides complaining of persistent barriers to trade.

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