Pak-Central Asia Trade Boom: Central Asia Republics(CARs) in the First Quarter of FY 2023-24

ISLAMABAD - In a groundbreaking turn of events, Pakistan's trade relations with Central Asia Republics (CARs) have soared to unprecedented heights during the initial quarter of the 2023-24 fiscal year, painting a vibrant picture of prosperity and partnership. This surge in trade isn't just a one-sided affair; it's a symphony of collaboration involving Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan, and Kyrgyzstan, all contributing to Pakistan's remarkable trade achievements.

It all started with a historic Memorandum of Understanding between Pakistan and Uzbekistan in May 2020. This laid the foundation for a Joint Working Group on Trade and Investment, a catalyst for boosting bilateral trade opportunities. 

Pakistan and Uzbekistan took this commitment a step further in 2021 by signing a Transit Trade Agreement, in addition to other accords designed to enhance transit trade. This comprehensive agreement opens the doors for road and rail transport of goods and streamlines customs procedures. One game-changing aspect is the redirection of Uzbekistan's trade flow from Iran's Port Bandar Abbas to Pakistani seaports. This shift is set to not only enhance Pakistan's connectivity with the CARs but also solidify its role as a pivotal transit hub.

Reducing Trade Barriers

Fast forward to March 2022, and the two nations sealed a Preferential Trade Agreement (PTA) covering a wide range of thirty-four goods. The primary aim? To slash existing tariffs, some of which currently range from a staggering 20 percent to 100 percent. Additionally, the agreement seeks to minimize non-tariff barriers through mutual recognition of standards and simplification of procedural requirements for the designated goods. These initiatives have set the stage for a remarkable upsurge in trade and economic collaboration.

Irfan Iqbal Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), is an advocate for Pakistan's export potential to the Central Asia region. He lauds the positive impact of the Preferential Trade Agreement and Transit Trade Agreement with Uzbekistan. However, Sheikh underscores the importance of a comprehensive logistics plan to transport goods to landlocked CAR countries. He urges the Pakistani government to develop a well-defined logistics strategy, ensuring a smooth flow of goods to the CARs.

Regional Dynamics

Ahsan Zafar Bakhtawri, President of the Islamabad Chamber of Commerce and Industry (ICCI), offers an intriguing perspective. While a regional Free Trade Agreement (FTA) with Central Asian economies might not deliver all anticipated benefits, he sees tremendous potential in entering this market. Diversifying historically concentrated export destinations and forging connections with Central Asia could open doors to European and Eurasian Economic Union countries. Energy cooperation with resource-rich Central Asia might just be the key to leveraging Pakistan's strengths. Moreover, Pakistan's direct sea access offers a strategic advantage to the landlocked CARs.

In the unfolding story of Pakistan's trade relations with the Central Asian Republics, the stage is set for a new era of cooperation, prosperity, and regional influence. With visionary leadership and strategic agreements in place, the possibilities are boundless, and the future is bright.