Being a neighbour, Pakistan gives paramount importance to its relations with Afghanistan as Pakistan’s peace and stability depend on Afghan peace and stability. Prime Minister (PM) Nawaz Sharif after coming to power visited Afghanistan. Similarly, Afghan President Ashraf Ghani also visited Pakistan after assuming the office of president while expressing his desire to initiate a new chapter in troubled Pak-Afghan relations. Traditionally, the Pak-Afghan relationship has been characterised by mutual mistrust and lack of confidence, and India has always been a decisive factor in determining Pak-Afghan relations. President Ghani has also tried to address Pakistan’s concerns regarding India’s role in Afghanistan. Recently, Khyber Pakhtunkhwa Chief Minister (CM) Pervez Khattak led a delegation of senators and provincial ministers to Kabul on a two-day official visit and held meetings with the Afghan president, chief executive and other officials. The CM informed them about the agenda of the government and reforms that it has been undertaking. He also mentioned the socio-economic losses incurred by Khyber Pakhtunkhwa in the war on terror.Pakistan’s visiting delegation also raised the issue of Afghan refugees in Pakistan. A million and a half refugees in Pakistan are officially registered while twice as many are unregistered. The Proof of Registration (PoR) cards given to Afghan refugees are likely to expire in December 2015. To decide the future status of Afghan refugees, a Pakistan, Afghanistan and the UN Refugee Agency (UNHCR) tripartite meeting is going to be convened in August, and three anticipated proposals will be put forward: voluntary repatriation to Afghanistan, resettlement in a third country and local integration in Pakistan. What happened in the past was just the extension of the expiry date of PoR cards thrice and perhaps the same is going to happen this time as well.Apart from strategic considerations, Afghanistan is significant in achieving regional connectivity and enhancing regional economic interdependence because it serves as a land bridge to reach landlocked Central Asian States, presenting huge trade and investment opportunities. The US and China both have chalked out their plans to link the Pakistan-Afghanistan region with the rest of the world through maritime land transit and trade routes. China’s policy regarding the Silk Road economic belt and the New Silk Road Initiative are well-known proposals to link South Asia with Central Asia.To become part of regional connectivity, Pakistan and Afghanistan both need to enhance their own trade and economic relations. Being a landlocked state, Afghanistan’s trade has been passing through Pakistan and has been regulated under the 1965 Afghan Transit Trade Agreement that allowed transit to Afghan imports from all countries through the port of Karachi. The Afghan Pakistan Transit Trade Agreement (APTTA) was signed in 2010, which regulates trade between Afghanistan and Pakistan. Afghanistan is one of the largest trading partners of Pakistan and bilateral trade reached $ two billion in 2014. Both countries have signed APTTA to remove hurdles in bilateral trade. It will provide a sound platform to enhance trade by facilitating the private sector. Both states also held negotiations to discuss the Preferential Trade Agreement (PTA) during President Ashraf Ghani’s visit to Pakistan. In this regard, the Rawalpindi Chamber of Commerce and Industries organised a ‘Made in Pakistan’ exhibition in Kabul. Commerce Minister Mr Khurram Dastgir urged the Pak-Afghan Joint Chamber of Commerce and Industry to take up joint ventures by organising such exhibitions in Central Asia as well as other cities of the world. Pakistan has also been planning to construct dry ports at the Torkham and Chaman border to facilitate trade with Afghanistan. Pakistan has been working on infrastructure development projects to enhance road connectivity with Afghanistan, which will help in promoting economic relations. Work on the Peshawar-Torkham Highway has been completed as it is the main trade route between Pakistan and Afghanistan. The new Afghan leadership has engaged with Pakistan in a highly constructive and candid way. It has realised Pakistan’s concerns regarding the role of extra-regional powers in Afghanistan and has been addressing these issues in mutually beneficial dialogue with Pakistan. PM Nawaz Sharif has also reiterated Pakistan’s commitment to support the Afghan-led and Afghan owned reconciliation process and to facilitate the Afghan peace process. The trust and confidence between Pakistan and Afghanistan will enhance regional stability. The writer works at the Islamabad Policy Research Institute (IPRI) and can be reached at samanz.pk@gmail.com