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Cabinet approves transit trade deal with Uzbekistan

ISLAMABAD: The Federal Cabinet has approved the agreement between Uzbekistan and Pakistan on Transit Trade (AUPTT) to be signed on July 15, which would give access of Pakistani seaports to Uzbekistan and offer access to all five Central Asian States for Pakistani exports, official sources told Business Recorder.

The Commerce Division briefed the Cabinet on July 6, 2021 that Afghanistan Pakistan Transit Trade Agreement (APTTA) 2010 gave access to Pakistan’s trade with Central Asia for taking goods up to border crossing points of Afghanistan with Uzbekistan, Tajikistan and Turkmenistan, whereas, Pakistan had no arrangement to take exports beyond those points.

As part of the vision of the government, to make Pakistan a trade, transit and trans-shipment hub, and enhance regional connectivity with Central Asia, Uzbekistan was offered to use seaports of Pakistan, which would provide them the shortest route for trade, during visit of the Deputy Prime Minister to Islamabad in September 2020.

Uzbekistan was currently highly reliant on the Iranian seaport of Bandar Abbas, accessed through Turkmenistan but the country also had transit trade agreement with Afghanistan while Pakistan also has Afghanistan Pakistan Transit Trade Agreement. The contours of the bilateral transit trade agreement were further discussed during first meeting of the Joint Working Group on Trade and Economic Affairs at Tashkent in February, 2021.

Hence, after approval of the Prime Minister, Ministry of Commerce organized sixteen technical negotiations sessions with Uzbek side from April-June 2021. The following Ministries/organizations participated in the sessions led by Ministry of Commerce and provided input; (i) Ministry of Foreign Affairs; (ii) Ministry of Communication;(iii) Ministry of Law & Justice; (iv) Federal Board of Revenue; (v) Department of Plant & Protection (Ministry of National Food Security and Research);(vi) Attorney General Office; (vii) Ministry of Maritime Affairs and; (viii) Ministry of Railways.

The Agreement between Uzbekistan and Pakistan had been negotiated and finalized covering trade and transit of goods by road and rail along with customs procedures, largely on the pattern of APTTA, which was a comprehensive and time-tested agreement as well as improved mechanisms. The Agreement between Uzbekistan and Pakistan on Transit Trade (AUPTT) would give access of Pakistani seaports to Uzbekistan and offer access to all five Central Asian States for Pakistani exports. This would help enhance trade and regional connectivity and open the doors for increasing Pakistan’s exports to Uzbekistan and harnessing the potential of a $ 90 billion market in Central Asia.

The highlights of the agreement are as follows; (i) Transit Trade between Uzbekistan and Pakistan must take place along pre-determined routes and only utilize specified ports and border crossings;(ii) Uzbekistan and Pakistan were obligated to ensure that suitable infrastructure and personnel were available at border crossings and would provide separate spaces for off dock terminals and warehousing, at entry/exit points and other customs notified places, on reciprocal basis; (iii) while each country remained responsible for licencing transport operators (e.g. trucking firms) registered in their territory, Uzbekistan and Pakistan would issue Road Transport Permits on the basis of which transport operators would be able to transport goods through the other country’s territory; Uzbek trucks would carry goods via Pakistan to seaports rather than having to re-load them onto Pakistani trucks at the Afghanistan Pakistan border and vice versa; (iv) The Uzbek government would recognize Pakistani driver’s licences and vehicle registration documents, and vice versa; (v) the Uzbek and Pakistani governments would expedite and simplify the process for awarding multiple-entry visas to truck drivers from each other; (vii) with the exception of selected perishable items, goods transiting through Uzbekistan and Pakistan would be stored in sealed containers meeting international specifications;(viii) the Uzbekistan-Pakistan Transit Trade Coordination Committee (UPTTCC), which would be established under the AUPTT, would be responsible for monitoring and facilitating the implementation of the agreement; (ix) grievances redressal mechanism; (x) dispute settlement mechanism and arbitration.

The final draft of the Agreement between Uzbekistan and Pakistan on Transit Trade (AUPTT) has been vetted by the Ministry of Law and Justice and finalized after incorporating amendments proposed by the Ministry of Law and Justice.

Copyright Business Recorder, 2021

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