Pakistan, Afghanistan sign Preferential Trade Agreement to reduce tariffs

ISLAMABAD: Pakistan and Afghanistan, in a major development in trade relations, have signed a Preferential Trade Agreement (PTA) to reduce tariffs on each other’s imports, Ministry of Commerce officials here said.

Afghan Deputy Minister for Commerce and Industry Mulla Ahmadullah Zahid and Pakistan’s Commerce Secretary Jawad Paul signed the agreement at a ceremony in Islamabad on Wednesday.

PTA used to be a trade deal between two or more countries where they agree to reduce or eliminate tariffs and other trade barriers on certain goods and services traded between them.

Both countries have agreed to reduce tariff rates to 27% from 60 percent.

Commerce Ministry officials said that the agreement will be approved by the federal cabinet. It will come into effect from August 1, 2025 and will be effective for an initial period of one year.

Preferential agreement will be extendable with mutual consent, officials said.

Under the agreement, Afghanistan will reduce tariffs on mangoes, kinnows, bananas and potatoes coming from Pakistan and Pakistan will reduce duties on grapes, pomegranates, apples and tomatoes from Afghanistan.

The sides have also agreed for constitution of a technical committee for a transit trade agreement between Pakistan and Afghanistan.