ISLAMABAD: In a significant step toward strengthening economic ties, Pakistan and Afghanistan have signed a Preferential Trade Agreement (PTA) aimed at reducing tariffs and promoting cross-border trade. The agreement was formalized on Wednesday during a ceremony held in Islamabad, with Pakistan’s Commerce Secretary Jawad Paul and Afghanistan’s Deputy Minister for Commerce, Mullah Ahmadullah Zahid, serving as signatories.
Under the terms of the PTA, both countries have agreed to slash tariff rates on a range of goods from 60% to 27%, a move expected to provide substantial relief to traders and stimulate economic activity in the region. The agreement will officially come into force on August 1, 2025, and will initially remain valid for one year.
The PTA focuses particularly on agricultural and perishable goods, aiming to support farmers and exporters in both nations. Pakistan will lower import duties on Afghan products such as grapes, pomegranates, apples, and tomatoes. In return, Afghanistan will reduce tariffs on Pakistani exports including mangoes, kinnow (mandarins), bananas, and potatoes.
Officials from both sides expressed optimism that the agreement would not only facilitate smoother trade but also build trust and foster long-term economic collaboration between the neighboring countries. By reducing costs for importers and exporters, the deal is expected to address long-standing trade imbalances and contribute to regional stability through economic interdependence.
Economic analysts view the agreement as a step forward in reviving bilateral trade, which has faced numerous challenges over the past decade due to political tensions, border closures, and logistical issues. The PTA could also serve as a foundation for a broader Free Trade Agreement (FTA) in the future, depending on its success over the next year.
