In a key development on the economic front, Pakistan and Afghanistan have inked a Preferential Trade Agreement (PTA) under which both countries will significantly reduce tariffs on each other’s imports, reported Aaj News on Wednesday.
The agreement was inked at a ceremony held in Islamabad between Afghan Deputy Minister for Commerce and Industry Ahmadullah Zahid and Pakistan’s Commerce Secretary Jawad Paul.
A PTA is a trade pact between two or more countries where they agree to reduce or eliminate tariffs and other trade barriers on certain goods and services traded between them.
Under the agreement, both countries have agreed to reduce tariff rates from 60% to 27%.
As per the report, the step has been taken to promote bilateral trade and increase economic cooperation in the region. The agreement will come into effect from August 1, 2025 and will be effective for an initial period of one year.
Under the agreement, Pakistan will reduce duties on grapes, pomegranates, apples and tomatoes imported from Afghanistan, while Afghanistan will reduce tariffs on mangoes, kinnows, bananas and potatoes coming from Pakistan.
Earlier, Business Recorder reported that as per the proposed draft PTA, recognising the importance of facilitating bilateral trade between the Islamic Emirate of Afghanistan and the Islamic Republic of Pakistan, the Ministry of Industry and Commerce, Afghanistan (MoIC) and the Ministry of Commerce, Pakistan (MoC) agree to implement an Early Harvest Programme (EHP) to enhance trade flows and economic cooperation between the two countries.
Article 1: Preferential Tariff Treatment: (i) the Contracting Parties — the Islamic Emirate of Afghanistan (“Afghanistan”) and the Government of Pakistan (“Pakistan”), hereinafter collectively referred to as the “Contracting Parties” and individually as a “Contracting Party” — agree to provide Preferential Tariff Concessions on a selected list of agricultural goods under the Early Harvest Program; and (ii) the concessions shall be implemented by reducing tariffs and duties on the following products originating in the respective territories and destined for the other: Afghanistan exports: tomatoes, grapes, apples, and pomegranates while Pakistan will export potatoes, kinnows, bananas and mangoes
Article 2: Development of Preferential Trade Agreement (PTA): The Contracting Parties agree to initiate negotiations for a comprehensive Preferential Trade Agreement (PTA) based on the performance of the Early Harvest Program and mutual satisfaction of both sides.
Article 3: Rules of Origin: The agricultural products listed above must be: (i) harvested, picked, or gathered in the exporting country; (ii) wholly obtained, and (iii) accompanied by a Certificate of Origin issued by the designated authority of each country to qualify for preferential treatment.
Article 4: Certification; (i) for Pakistan, the Certificate of Origin shall be issued by the Trade Development Authority of Pakistan (TDAP); and (ii) for Afghanistan, the Certificate of Origin shall be issued by the Ministry of Industry and Commerce (MoIC).
Article 5: Implementation Date: The Early Harvest Program shall be implemented starting 1st August 2025.
Article 6: Duration and Reciprocity: (i) the tariff concessions shall be granted for a period of one year, from 1st August 2025 to 31st July 2026 ;(ii) the program may be extended upon mutual agreement; and (iii) all concessions are to be based on reciprocity and parity.
Article 7: PTA Implementation Committee: a PTA Implementation Committee shall be formed to oversee the Early Harvest Program. It shall: (i) be led by MoIC (Afghanistan) and MoC (Pakistan); (ii) include representatives from Customs and Agriculture Ministries of both countries ;(iii) meet on a monthly basis, and ;(iv) be responsible for monitoring, evaluation, and recommending improvements to the programme.
