Identifier
Created
Classification
Origin
09KABUL2965
2009-09-26 12:51:00
CONFIDENTIAL
Embassy Kabul
Cable title:  

COMMERCE MINISTER OUTLINES VISION FOR AF-PAK TRANSIT TRADE TALKS

Tags:  ETRD EAGR EAID PREL AF PK 
pdf how-to read a cable
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C O N F I D E N T I A L SECTION 01 OF 02 KABUL 002965 

SIPDIS

SRAP FOR MARY BETH GOODMAN AND BOB DEUTSCH
DEPT PASS USTR DEANGELIS

E.O. 12958: DECL: 09/23/2019
TAGS: ETRD, EAGR, EAID, PREL, AF, PK
SUBJECT: Commerce Minister Outlines Vision for AF-PAK Transit Trade
Talks

REF: KABUL 2825

Classified By: CDDEA Ambassador E. Anthony Wayne reasons 1.4(b) and
(d).

C O N F I D E N T I A L SECTION 01 OF 02 KABUL 002965

SIPDIS

SRAP FOR MARY BETH GOODMAN AND BOB DEUTSCH
DEPT PASS USTR DEANGELIS

E.O. 12958: DECL: 09/23/2019
TAGS: ETRD, EAGR, EAID, PREL, AF, PK
SUBJECT: Commerce Minister Outlines Vision for AF-PAK Transit Trade
Talks

REF: KABUL 2825

Classified By: CDDEA Ambassador E. Anthony Wayne reasons 1.4(b) and
(d).

1) (C) Summary: Access for Afghan trucks through Pakistan to its
Wagah border crossing with India is "absolutely essential" for the
Afghan government to conclude the Afghanistan-Pakistan Transit Trade
Agreement (APTTA),Commerce and Industry Minister Shahrani said
September 23. In return for unimpeded access to Wagah, Afghanistan
is willing to include language addressing Pakistan's concerns about
re-export/smuggling. Shahrani said he will ask USG help in
encouraging Pakistan to be more forthcoming when Shahrani visits
Washington in October (septel). In particular, Shahrani hopes the
U.S. will press Islamabad to send their Commerce Minister Makhdoom
Amin Fahim to the upcoming trilateral meeting in Washington
(tentatively slated for late November) to ensure APTTA remains a
central element of a pro-growth strategy for both countries. In a
meeting earlier in September, Afghanistan's lead APTTA negotiator,
Commerce Deputy Minister Farhadi had also stressed the Government of
the Islamic Republic of Afghanistan's (GIRoA) belief that both
parties could sign the APTTA by the end of the year. Farhadi noted
Afghanistan's chief negotiating goals for the upcoming fourth
negotiation round (slated for October 10-12 in Kabul) are to reach
agreement on the transportation protocols, including the new railway
article, and dispute settlement resolution mechanisms. End summary.

Shahrani Focused on APTTA
- - - - - - - - - - - - -

2. (C) Meeting with Senior Deputy Coordinating Director for
Development and Economic Affairs and Econ Counselor September 23,
Commerce and Industry Minister Shahrani stressed he recently briefed
the Afghan cabinet on APTTA, and it had unanimously agreed
Afghanistan's unimpeded access to Pakistan's Wagah border crossing
with India is essential to the Transit Trade Treaty's successful
conclusion. Noting that Afghanistan's access to the burgeoning
Indian market is critical to the Afghan government's economic growth
strategy, Shahrani said the 1967 UN convention on landlocked
countries clearly supports Afghanistan's position.
He added
Afghanistan places no barriers on Pakistani trade through Afghanistan
to Central Asia and that Afghanistan simply seeks reciprocal
treatment.

Smuggling/re-export concerns
- - - - - - - - - - - - - -

3. (C) Responding to emboffs' questions, Shahrani said Pakistan is
worried about "re-exports," i.e., smuggling, along the
Afghan-Pakistani border and said that the Afghan government is
committed to complying with GOP security and anti-smuggling concerns.
Shahrani argued, however, that the problematic re-export situation
is actually occurring more in Pakistan's Federally Administered
Tribal Areas (FATA) where truck loads destined for Afghanistan are
increasingly unloaded for resale in Pakistan rather than re-exported
from Afghan territory. Shahrani stressed the GIRoA is willing to
include Pakistan's draft anti-smuggling language in the APTTA, if it
would give Afghanistan the access it needs/wants to Wagah and India's
growing markets for fruits, dried fruits, nuts, and other Afghan
products. He added that the Afghan government also supports the
USAID-funded joint assessment study of the economic impact of
re-exports, expected to take six to twelve months to complete.

4. (C) Shahrani claimed many Pakistani authorities, particularly in
the security forces, unofficially obstruct anti-smuggling actions
since smuggling creates thousands of jobs in Pakistan's FATA adjacent
to Afghanistan. Shahrani opined that the Pakistan Government is
hesitant to dismantle these FATA smuggling operations for fear that
increased unemployment and poverty would drive new recruits into
insurgency groups. The Minister also noted the major Afghan,
Pakistan, and international coalition military operations underway in
or near the border and suggested this reality argues for Islamabad to
take a different approach to the issue in the transit trade talks.

Looking for Fahim
- - - - - - - - -

5. (C) Shahrani observed he had to cancel his participation in the
third round of APTTA talks in August because Pakistan's Commerce
Minister Makhdoom Amin Fahim was unable to participate. In early
September Shahrani again sought a meeting with Fahim in Pakistan, but
Fahim was not in country. Shahrani requested USG assistance to
encourage inclusion of Minister Fahim in the Pakistani delegation to
the upcoming Washington trilateral, because an inter-ministerial
exchange is crucial to keep APTTA on track. Shahrani described Fahim
as a "clean" minister with a solid reputation. In this light,
Shahrani reiterated his personal belief that any effort to foster a

KABUL 00002965 002 OF 002


good rapport between both Commerce Ministers may prove key to
successful conclusion of APTTA by the end of the 2009.

Commerce Ministry's APTTA Lead Negotiator Optimistic
- - - - - - - - - - - - - - - - - - - - - - - - - -

6. (C) In an earlier meeting (September 5),Afghanistan's Lead APTTA
Negotiator Farhadi had also stressed his minister's belief that both
parties could sign APTTA by the end of the year. He also noted
Afghanistan's bottom line is access for Afghan trucks to the Wagah
border crossing. Farhadi said Pakistan's principal goal is to
resolve smuggling issues and obtain Afghanistan's help in bringing
the Indian government back to the table for the Composite Dialogue
with Pakistan. (See para 9.)

Round Four Challenges
- - - - - - - - - - -

7. (SBU) During the upcoming APTTA round slated for October 10-12 in
Kabul, Farhadi said the two sides need to complete the transport
protocol and develop the rail protocol, both introduced during Round
Three in Islamabad. The dispute settlement mechanism is particularly
important for the Afghan side because they anticipate implementation
issues down the road. While the Pakistani team agreed to the
principle of arbitration during Round Three, it did not agree to
specifics of the dispute settlement mechanism. The Afghan
negotiators requested legal technical assistance from the U.S. to
help out with these issues, and a USAID-funded international trade
lawyer arrived on September 5 to provide them short-term assistance.
8. (C) Farhadi also talked about the border trade. According to
Farhadi, the two sides have informally agreed to Terms of Reference,
but the Pakistanis want the study results to be included as an annex
to the agreement. The Afghan side recognizes doing so would delay
signature and wish to de-couple the two. As noted above, the Afghan
side appears willing to agree to Pakistani language on re-exports in
return for Wagah access.

Composite Dialogue with India
- - - - - - - - - - - - - - -

9. (C) Farhadi reported the Pakistanis were pushing the Afghan side
to intervene with India to restart its Composite Dialogue with
Pakistan halted after the Mumbai bombings. Farhadi referred to
President Karzai's exchange with S/SRAP Holbrooke on August 21
concerning APTTA, noting that when President Karzai referred to
bringing the Indians along on the agreement, he was referring to
Afghan government efforts to seek agreement from India that Afghan
trucks would be able to enter India from Wagah and that these efforts
would help to bring India back to the negotiating table with
Pakistan.

Next Rounds
- - - - - -

9. (C) Farhadi anticipates a final round early November in Islamabad
following Round Four in Kabul. He envisions follow-up sessions at a
more senior level to wrap up APTTA by the end of 2009 and noted he
was prepared for 'marathon' sessions, if need be. Farhadi added that
the agreement needs no Afghan or Pakistani Parliamentary ratification
prior to signature.

EIKENBERRY