Improving Afghanistan-Pakistan Trade Relations

Abstract

Both bilateral and transit trade between the two countries are impacted by broader developments. Regional great power maneuvers, such as China's investment in Pakistan's deep-water seaport at gawadar and India's partnership with Iran on is Chahbahar port, Impact the optics and orientation of trade. With the easing of sanctions on Iran and the associated shifts in the region, neither country can afford to take the volume and value of trade with the other for granted. While Pakistan is essential to Afghanistan's access to seaports, Afghanistan's role in connecting Pakistan with the Central Asian Republics is no less crucial. THe future of trade between the two counties will be shaped by the evolution of integrated trade will rely on the recognition of comparative advantages, as opposed to absolute advantages in manufacturing. Investment in greater connectivity must take precedence over market policies.