PESHAWAR: Pak-Afghan Joint Chamber of Commerce and Industry (PAJCCI) as a lead chamber on barter trade committee across the border has started deliberations focused on developing practical, sustainable and agile barter trade mechanism with Afghanistan.
According to a press statement issued here on Monday, Afghan side under leadership of Khan Jan Alokozai, Co-Chairman PAJCCI has already conducted the first meeting whereas Pakistan side under Zubair Motiwala, Chairman PAJCCI initiated the first session in Karachi attended by various relevant trade associations and representatives of different chambers.
PAJCCI was nominated by Ministry of Commerce to formulate Pakistan side barter trade committee with the task of deliberating various options and methods to formulate final recommendations which will be then approved by both governments.
The mechanism will be developed under the guidelines provided by the Ministry of Commerce, drawing certain parallels from PAK-IRAN barter trade and PAK-AFG trading dynamics.
Barter trade can serve as an alternate to monetary transactions especially when Afghanistan still lacks operational banking channel and facing international sanctions whereas banks continued refusal to process third party payments.
The expiry of E-form and EIF waiver is due on 30th June 2022 hence formation of mechanism is a matter of grave urgency however it needs more time as agreement between Pakistan and Iran has different background on Oil-Food based sectoral engagement.
Whereas trading with Afghanistan is based on diversified products and via multiple borders based on local cross border industries.
It will also require updating Pakistan Single Window system with option of barter trade supporting the easy processing of sales tax refunds and duty draw backs in case of exports, special module and handling by Pakistan Customs.
Speaking on the occasion, Chairman PAJCCI, Zubair Motiwala stated that business community is already facing delays and issues in obtaining sales tax refund and duty drawbacks through land routes, hence careful decorum needs to be developed to avoid such discrepancy while conducting barter trade.
Barter trade with Afghanistan will only be successful if trade barriers are removed and work around is developed before hand for processing documentation and clearance of goods with final settlement of payments between traders via independent and credible entity.
Motiwala remarked that barter mechanism will need time to evolve and its TORs need to be carefully devised, hence the waiver of EIF and E form must be approved for further 6 months, giving ample time for committees across the border to conduct deliberations in this context.
He urged government to take immediate steps in approving the extended waiver and to ensure that voice of business community is given due weightage in improving economy especially the trade with nearest neighbor which has vast opportunities at very low cost.
He said that the barter trade payment settlement will require very stringent and credible mechanism which must be trusted by all parties and TOR must be developed which must undertake all prevailing conditions and unique requirements of both sides.
The system shall be neutral and transparent in all aspects while supporting smooth trading activities by PAJCCI and government entities; Customs, FBR, State Bank and Ministry of Commerce.
PAJCCI will continue further sessions with multiple stakeholders to gather deep insights and draw from business community experience before submission of final recommendations.