Country Report Afghanistan January 2011

Economic policy: Another Pakistan-Afghanistan transit agreement is signed

On October 29th 2010 the governments of Pakistan and Afghanistan signed another element of the transit trade agreement, extending the agreement signed in July. The July agreement allowed Afghan and Pakistani vehicles to transport goods within each other's borders. The new agreement allows Afghan vehicles access to Pakistan's border with India at Wagah; from there, Afghan goods can be transported to India on Indian vehicles. In return, Pakistan will gain access to the central Asian states through Afghanistan.

The agreement does not give India access to Afghanistan via land through Pakistan; this will continue under existing agreements through Pakistani sea ports. During the visit of Pakistan's president, Yusuf Raza Gilani, to Kabul, the Afghan capital, in early December, the two countries pledged to implement fully the Afghanistan-Pakistan transit trade agreement. The two countries hope to increase bilateral trade from US$2bn a year currently to US$5bn a year by 2015.

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