Afghanistan is a land locked country and Pakistan is obliged to provide it with access to sea ports under its international treaty obligations. Before I start writing on the issue, it would be appropriate to set in proper context the role of Pakistan for Afghan Transit Trade. Afghanistan has similar transit trade agreements with following countries including Iran, Tajikistan and Uzbekistan. Afghan Commerce Minister Dr. Anwar-ul-Haq Ahady recently visited Islamabad with the Afghan delegation for the 7th meeting of Pakistan-Afghanistan Joint Working Group to finalise the bilateral transit trade treaty which both countries are negotiating since 2008 and which is to replace the 1965 Agreement. The outcomes of this meeting were recorded in the minutes, which were signed in the Prime Ministers Secretariat. Since then this event, which was witnessed by Prime Minister of Pakistan and US Secretary of State, has been focus of attention of the media. Apprehensions have been expressed that interests of Pakistan have been compromised at the behest of some external powers. The Ministry of Commerce has been issuing clarifications on various opinions and misgivings about the new transit treaty. In this background this article is expected to provide a comprehensive clarification in order to remove confusions from the minds of the people of Pakistan. The status of the agreement I would like to categorically state that we have not yet signed the new agreement. The ceremony held at the PM Secretariat was in fact the signing of the minutes of the meeting. I would like to add that it is a routine practice that trade negotiation meetings usually end with a signing of the minutes or record note. The minutes or record notes are permanent record and are essential for drafting a consensus document. BACKGROUND Before I move to the provisions to some of the important elements of the new treaty, I would like to provide a brief history on our current negotiations with Afghanistan. In February 2006 the then Prime Minister approved the recommendations of the 4th meeting of National Trade Corridor to start the process of renegotiations with Afghanistan for a new transit trade agreement. It was felt that the present Afghan Transit Trade Agreement which was signed on March 2, 1965 has become outdated and un-favourable for Pakistan for the following reasons:- (i) It did not contain provision of transit trade to the Central Asian Republics through Afghanistan, which is an impediment to Pakistans aspirations to become a gateway for transit trade to Central Asian Republics (ii) It restricts transport of Afghan cargo through Pakistan to Pakistan Railways only, while much of the cargo is now being transported by road. (iii) It provides for movement of Afghan cargo through one sea port i.e. Karachi, while Pakistan now has three operational sea ports, Karachi, Port Qasim and Gwadar. (iv) Customs and other procedures stipulated in the 1965 Agreement are outdated. These provide an opportunity for pilferage and smuggling. (v) In 1965 there was hardly any containerized cargo. There has been tremendous improvements and developments in international logistics, supply chain and information technology. There was therefore a need to update the existing treaty to cater to these developments In November 2008, Afghan authorities submitted a draft Transit Agreement for Pakistans consideration. The Ministry of Commerce started consultations with the stakeholder Ministries to firm up Pakistans position on the new proposed Agreement. The Ministry of Commerce also obtained mandate from the Cabinet in March, 2009 to commence negotiations with Afghanistan to finalize the Agreement. Consequently, the first meeting of the Afghanistan-Pakistan Joint Working Group on Transit Trade Agreement was held at Islamabad on 14th May, 2009. All the stakeholders (Communications, Interior, MOFA, Railways and FBR) were members of Pakistans negotiating team. During the visit of the President of Pakistan to USA, a Memorandum of Understanding was signed in Washington on May 6, 2009 by Foreign Ministers of Pakistan and Afghanistan on Transit Trade to conclude the Agreement by end 2009. Indian exports to Afghanistan Indian goods under the 1965 Agreement are transiting through the territory of Pakistan to Afghanistan imported via sea ports. In the new treaty we would continue to provide this facility to Afghanistan. There have been numerous reports in the local media and television channels that we have allowed transit of Indian goods entering Pakistan through Wagah land border routes. I would like to clarify that this is absolutely incorrect. There have been persistent requests from Afghanistan to allow the transit of Indian goods through Wagah land border. We have always maintained that this a bilateral issue between Pakistan and India and we would address this under Composite Dialogue with India. Unfortunately this process has been stalled after the Mumbai incident. Afghan exports to India Afghanistan is already exporting to India not only through Karachi port but also through Wagah land route. The land route through Wagah is in use since 1980. In the new treaty, we have continued the policy to allow export of Afghanistan to India through Wagah land border station. The Afghan consignments are currently entering Pakistan through Chamman and Torkhum from where they are shifted to Pakistani trucks and transported to Wagah. In the new treaty, we have allowed Afghan trucks to travel upto Wagah and off load their exports consignments destined for Indian on the Pakistani side of the border. From there these consignments will be shifted to India under proper supervision. Afghan cargo transportation through Afghan trucks This concession is reciprocal and now Pakistani trucks would carry Pakistans export cargo to Central Asian States through Afghanistan. The decision to allow Afghan trucks to export their cargo through Karachi and Wagah will facilitate their exports as it would reduce the transit time which is currently required to loading and reloading of cargo. The relevant law enforcement agencies will ensure that the Afghan trucks travel on the designated routes. Use Of Biometric System We have also developed a mechanism to grant permits and visas for the vehicles and drivers accompanying the vehicles with the use of biometric information system to monitor entry and exit of vehicles and accompanying driver and crew. Prevention of smuggling While negotiating the new treaty we were concerned that one of the main issues affecting our economy was the informal trade or smuggling which was hurting not only our local industry but also undermining our revenue collection. From the beginning of the negotiations, we told our Afghan friends that the new treaty would not be acceptable unless we devise affective and sustainable measures to address misuse of transit trade by certain unscrupulous elements. Three of the most important development in our negotiations have been:- (a) a consensus on the requirement of bank guarantee for the transit of Afghan cargo through Pakistan. The bank guarantee would only be released after the satisfaction of Pakistani authorities that goods have reached Afghanistan; (b) Agreement to install tracking devices on the vehicles transporting transit cargo; and (c) the use of containerized trucks and sealable trucks according to international standards. These measures would ensure that there are no pilferages or leakages during the transit journey. Dispute settlement mechanism We have also agreed on a Dispute Settlement Mechanism through the creation of the Afghanistan - Pakistan Transit Trade Coordination Authority and setting up of a Arbitral tribunal in order to ensure the smooth functioning of the new treaty. It would be our edeavour to resolve disputes through mutual consultations. Involvement of private sector in negotiation The representatives from the private sector were also included in our negotiating team in addition to all other stakeholder Ministries, We held seven meetings at Islamabad and Kabul alternatively and reached consensus on the new Treaty. I am confident that the new Transit Trade Agreement with Afghanistan is the best outcome that we could achieve through this process. The negotiating team has sufficiently addressed our concerns keeping in view our national interests. Whatever facilities we have provided to Afghanistan will be available to our exporters to Central Asia through Afghanistan. The new Treaty would usher in a new era of peace, prosperity and harmony in this region. Minister for Commerce