ISLAMABAD: In a landmark step to improve economic ties, Pakistan and Afghanistan have signed a Preferential Trade Agreement (PTA) that aims to reduce tariffs and boost bilateral trade. The agreement was signed in Islamabad by Afghanistan’s Deputy Minister for Commerce and Industry, Ahmadullah Zahid, and Pakistan’s Commerce Secretary, Jawad Paul.
Under the new agreement, tariffs on select goods will be slashed from 60% to 27%, easing trade barriers between the neighboring countries. The PTA will take effect from August 1, 2025, and will remain valid for one year, with the possibility of extension upon mutual agreement. Officials say this move will create more favorable conditions for cross-border trade and support farmers and exporters in both countries.
The agreement focuses on agricultural products, which make up a large portion of trade between Pakistan and Afghanistan. Pakistan will reduce duties on imports of Afghan grapes, pomegranates, apples, and tomatoes. In return, Afghanistan will lower tariffs on Pakistani mangoes, kinnows, bananas, quinoa, and potatoes. These items are part of an Early Harvest Program (EHP), designed to kick-start the agreement by offering quick, targeted tariff relief.
Products eligible for the tariff reductions must meet specific rules of origin, meaning they must be harvested or produced in the exporting country and certified with a Certificate of Origin. A PTA Implementation Committee will meet monthly to monitor progress, address concerns, and ensure smooth operation of the agreement.
This PTA represents a shift toward structured and rules-based trade between the two countries. Analysts say it could lead to increased exports, better market access, and improved cooperation in other sectors over time. Both sides view the deal as a key step in deepening economic ties and advancing regional connectivity through shared economic interests.