Local tyre manufacturers believe that the Afghan Transit Trade Agreement (ATTA) is being misused. They said that the agreement had many loopholes which were being exploited by smugglers on both sides of the border. They also believe that a joint commission should be formed, comprising of officials from both Pakistan and Afghanistan, to stop this misuse of ATTA.
They have also urged the Federal Board of Revenue (FBR) to make sure that no undocumented tyres are sold in the market.
Hussain Kuli Khan, Chief Executive General Tyre, said in a statement, “This will also facilitate the Afghan government to import some items, which are not in the prohibited items or negative list as defined in the agreement, but unfortunately the channel was badly misused.”
The ATTA in concern was signed in 1965, and Khan was of the opinion that the agreement has many loopholes, which are enabling smuggling activities on both sides of the border.
He cited the example of tyres being supposedly imported to Afghanistan via Karachi. “However, they never make it there and find their way back to Pakistan through illegal means. A big quantity finds its way back into the country flooding the markets in the major urban centers of the country with the goods imported under the ATT,” he said.
Khan said that the tyre manufacturers appreciate that FBR has taken some actions against the smugglers but said that it needs to be a sustained effort. “FBR needs to be more vigilant and should raid the markets and seize the tyres without the valid documentary proof of legal imports,” he insisted.
He also highlighted the need for crackdowns against the warehouses of illegal tyres. He said that as the auto sector expands in Pakistan, the tyre industry is also gaining new possibilities. However, the smuggling of tyres from across the border is a major obstacle to the local tyre industry, he said.
He said that the local industry can expand to meet the ever-growing demand for tyres in the local market, but that will only be possible if the smuggling of undocumented tyres was controlled.
He said, “The last six months show that it can be achieved. The government should know that rampant smuggling in the name of ATTA is a serious challenge that is restricting local tyre industry to invest more in the manufacturing facilities”.
Pakistan’s annual tyre consumption stands at approximately 10 million tyres, excluding TBR (truck and bus radial) and motorcycle tyres. About 18 to 20 percent of this demand is fulfilled by the local industry, while imports make up for another 15 percent. The rest is either smuggled or undocumented, he informed.