Pakistan is calling for the use of letters of credit (L/Cs) to curb goods being smuggled into the country under the Transit Trade Agreement (TTA) signed last year by Pakistan and Afghanistan.

The call responds to concerns that duty free goods apparently destined for Afghanistan are instead being smuggled into Pakistan.

Indian connection

Under the TTA, Afghanistan can use Pakistani territory to import goods from any country, including India, which is viewed as the main beneficiary of the agreement.

India is a major trading partner of Afghanistan, and the two countries - which do not have a common border - have long argued for Pakistan to open its land routes up for transit trade between the two countries.

Smuggling concerns

The agreement specifies that Pakistan cannot impose import duty on transit goods, so there are concerns that goods destined for Afghanistan are reaching markets in Pakistan where they are sold duty-free.

Officials from both countries have discussed ways to prevent smuggling into Pakistan under the agreement.

L/C calls

During these discussions, Pakistan's Federal Commerce Minister, Amin Fahim, has suggested that goods should be imported into Afghanistan in L/C transactions.

The minister says the L/Cs should be opened in Afghanistan and that the documents should specify that goods must be delivered to a destination in that country.

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