Afghanistan–Pakistan Transit Trade Agreement

The Afghanistan–Pakistan Transit Trade Agreement (also known as APTTA) is a bilateral trade agreement signed in 2010 by Pakistan and Afghanistan that calls for greater facilitation in the movement of goods amongst the two countries.

The 2010 agreement supersedes the 1965 Afghanistan Transit Trade Agreement, which granted Afghanistan the right to import duty-free goods through Pakistani seaports, mostly notably from Karachi. The 1965 agreement did not offer Pakistan reciprocal rights to export goods to the Soviet Union, nor to the Central Asian Republics after the fall of the USSR.

Trade in goods smuggled into Pakistan once constituted a major source of revenue for Afghanistan. Pakistan official goods imported into Afghanistan under the 1965 Afghanistan Transit Trade Agreement were often immediately smuggled back into Pakistan over the porous border that the two countries share, often with the help of corrupt officials. In addition to illegal transfer of goods back into Pakistan, items declared as Afghanistan-bound were often prematurely offloaded from trucks and smuggled into Pakistani markets without paying requisite duty fees. This resulted in the creation of a thriving black market, with much of the illegal trading occurring openly, as was common in Peshawar's bustling Karkhano Market, which was widely regarded as a smuggler's bazaar. In Pakistan clamped down in 2003 on the types of goods permitted duty-free transit, and introducing stringent measures and labels to prevent smuggling. re-routing of goods through Iran from the Persian Gulf increased significantly resulting in steep decreases of smuggled goods in Pakistani markets. The 2003 measures lead to drastic declines in the number of undocumented jobs related to the transit and sale of smuggled goods; jobs and revenues of which also helped fuel the black economy, often intertwined with the drug cartels, of both countries.

The ATTA did not grant Pakistan reciprocal rights to export goods across Afghan territory to neighbouring countries. Pakistani attempts to access the Central Asian markers were frustrated by political instability in Afghanistan that had been ongoing since the late 1970s. As Afghanistan became increasingly dangerous as a transit corridor, China, Pakistan, Kazakhstan, and Kyrgyzstan in 1995 devised a separate treaty named the "Quadrilateral Agreement on Traffic in Transit" (QATT), and signed the treaty in 2004. Despite signing of the QATT, the agreements full potential was never realised, largely on account of poor infrastructure links between the four countries.

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