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WTO Bali accord: Pakistan to open routes for transit trade

WTO Bali accord: Pakistan to open routes for transit trade

ISLAMABAD: Pakistan is likely to open land routes for transit trade under an international agreement signed in December last under the World Trade Organisation (WTO), calling for all the countries to provide such transit for promoting regional trade.

Once the agreement comes into effective, possibly by July this year, Pakistan and India will be unable to prevent trade through their land routes.

Currently, Pakistan allows land route to Afghanistan for its exports to India, but the same facility is not available for India. However, after acceding to the agreement, Pakistan will be unable to exercise its discretion in this regard.

The agreement has also bound member countries to develop infrastructure on borders out of their own resources. The agreement says members are encouraged to make available, where practicable, physically separate infrastructure such as lanes, berths and similar for traffic in transit.

It likely that the agreement may put additional burden on the country’s resources and keeping in view this aspect, the FBR convened a donor conference to get assurances from donor agencies to provide funding to set up infrastructure.

Similarly, a view of the Bali agreement reveals that it does not have any such protection. According to sub-article 3 of article 11 of the agreement, members shall not seek, take or maintain any voluntary restraints or any other similar measures on traffic in transit. This is without prejudice to existing and future national regulations, bilateral or multilateral arrangements related to regulating transport consistent with WTO rules.

On the other hand, experts are of the view that the new agreement should be open for discussion before its ratification by Pakistan. The government has set up a steering committee, headed by Finance Minister Ishaq Dar to spearhead the development. Five federal ministers and seven secretaries will be its members.

The ratification of the agreement carries three categories of commitments binding member countries to implement it.

It is to be noted that the agreement does not allow a member country to impose any tax on transit goods for rehabilitation of damaged roads.