AF-PAK TRANSIT TRADE NEGOTIATIONS ROUND FOUR: DARK

UNCLAS SECTION 01 OF 02 KABUL 003814

SENSITIVE
SIPDIS

STATE FOR S/SRAP; SCA/FO, SCA/A, EEB/BTA
STATE PASS TO USTR FOR DELANEY AND DEANGELIS

E.O. 12958: N/A
TAGS: ETRD ECON EAID PREL PK AF
SUBJECT: AF-PAK TRANSIT TRADE NEGOTIATIONS ROUND FOUR: DARK
NEGOTIATING DAYS BEFORE ROUND FIVE RESOLUTION?

REF: KABUL 3341 AND PREVIOUS


1. (SBU) Summary: Pakistan,s Transit Trade Chief Negotiator
Shahid Bashir laid down tough markers in his opening
statements at the fourth round of negotiations on the
Afghan-Pakistan Transit Trade Agreement (APTTA) that set a
confrontational tone for the two-day negotiation. Pakistan
opened by stating Afghanistan,s chief goal, access to the
Indian border crossing at Wagah was off the table for
discussion, and proposed the two countries adopt an interim
arrangement on unauthorized trade, to include a negative
list, until the USAID-funded trade study was completed.
Progress was made in some protocols such as transit and rail,
but the Pakistan delegation also insisted on revisiting text
which had been completed in the previous
round. The long-delayed round was also marred by a rocket
attack on the hotel hosting the negotiations, though no one
from either delegation sustained injury. While some of the
Pakistani toughness may be attributed to the delegation
forcefully defending its commercial interests in front of its
stakeholder participants and earlier Afghan resistance to the
unauthorized trade study (reftels),the Afghan side now
privately doubts Pakistan,s intent to conclude the
agreement. Despite this difficult round, we should continue
to urge both sides to show the necessary flexibility at the
next round of talks (slated for December 19-21 in Islamabad)
to conclude the agreement by the end of this year. End
Summary.


2. (U) Afghan and Pakistani delegations met November 21 and
22, 2009 in Kabul for the fourth round of negotiations of the
Afghan-Pakistan Transit Trade Agreement (APTTA). Afghan
Minister of Commerce and Industry Wahidullah Shahrani
inaugurated the round by welcoming both delegations and
reiterating Afghan commitment to complete the APTTA before
the end of the year. The round was delayed for months
pending resolution of the Afghan elections and bilateral
scheduling conflicts despite frequent lobbying by both
Embassy Kabul and Embassy Islamabad to find a mutually
agreeable timeframe. The opening session was well-covered by
Afghan print, radio and television media. The first
afternoon,s negotiations were marred by a rocket attack on
the hotel parking lot where delegations were meeting, but
none of the participants sustained any injuries.

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Pakistan Enters the Round with Fists Flying
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3. (SBU) The Afghan delegation was visibly frustrated by
Pakistan,s opening gambit in which it declared it would not
talk about Afghan access to the Wagah border with India --
Afghanistan,s bottom line in the negotiations. In addition,
the Pakistani delegation tabled a proposal to develop an
interim measure regarding unauthorized trade between
Afghanistan and Pakistan which includes a negative list. The
October debate and ensuing delay between the Afghan Ministry
of Foreign Affairs and the Ministry of Commerce and Industry
(MOCI) over whether Afghanistan would agree to endorse a
study on unauthorized trade may have led the Pakistani
delegation to doubt Afghan commitment to solve the problem.
Moreover, given the study may not be concluded until six
months after the completion of the agreement, the Pakistan
team apparently wants to protect its industries and collect
revenues due in the interim period. The Pakistani proposal
suggested the private sector representatives could identify
those products highly prone to unauthorized trade, i.e.
smuggling, while Afghanistan believes the status quo should
be maintained until the unauthorized trade study is
finalized.


4. (SBU) The Afghans responded with a detailed five-year
graduated process to gain full import and export access
from/to India via the Wagah border. Under the Afghan
proposal, in year one the Afghan trucks with exports would
cross the Wagah border and be allowed to return with
Pakistani export goods to Afghanistan. Additional measures
would be granted in each year until reaching full export
access from/to India in year five. The Pakistanis reiterated
their position that this is a bilateral issue between
Pakistan and India and can not be discussed within the APTTA.

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One Step Forward, Two Steps Back
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KABUL 00003814 002 OF 002



5. (SBU) The sub-groups on Transit Trade Policy, Customs and
Transport moved forward on their respective protocols and
expect to conclude those sections at the next round.
However, in addition to the issues mentioned in paras 3 and
4, old bilateral thorns were revisited, including how to
refer to border crossings, since the two countries differ in
their definition of the border. The Pakistanis favored
Land border Stations, and the Afghans favored Legal
Crossing Points.,

-- The two sides have agreed on text to establish an
Afghanistan Pakistan Transit Trade Coordination Authority
(APTTCA) to monitor and facilitate effecnot re-appointed as Afghaner.
End Comment.
Eikenberry