VZCZCXRO2871
PP RUEHDBU RUEHPW RUEHSL
DE RUEHBUL #3102/01 2781400
ZNR UUUUU ZZH
P 051400Z OCT 09 ZDK
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 1839
INFO RUCNAFG/AFGHANISTAN COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 02 KABUL 003102 
 
C O R R E C T E D  C O P Y  (REMOVED DECLAS INSTR) 
 
SIPDIS 
SENSITIVE 
 
SRAP FOR MARY BETH GOODMAN AND BOB DEUTSCH 
DEPT PASS USTR DEANGELIS 
 
E.O. 12958 
TAGS: ETRD PREL AF PK
SUBJECT: Afghanistan-Pakistan Transit Trade Talks Postponed: 
Charting a New Way Forward 
 
REF: (A) KABUL 3036  (B) KABUL 3000  (C) KABUL 2943 
 
KABUL 00003102  001.2 OF 002 
 
 
¶1. (SBU)  Summary: Afghan Deputy Commerce Minister (and Chief Transit 
Trade Negotiator) Adib Farhadi told Embassy October 4, that the 
Pakistan side that day had requested a formal postponement of the 
upcoming fourth round of the Afghanistan-Pakistan Transit Trade 
Agreement (APTTA) until Islamabad received notification from the 
Afghanistan's Foreign Minister that the re-export/smuggling study 
(Refs A and B) will go ahead as planned and be incorporated into the 
APTTA.  In the absence of Commerce Minister Shahrani (in the U.S. 
October 4-9), Farhadi is leading the effort to try to persuade the 
Foreign Ministry to reverse its stand to exclude the 
re-export/smuggling study.  Looking for creative ways to bridge the 
impasse, Farhadi said that reciprocal side-letters on the 
re-export/Wagah issues would not work.  However, he is open to the 
notion of "protocols," but only if they are approved by both 
parliaments and enforceable as international agreements.  U.S. 
officials can usefully raise the protocol option and other creative 
solutions to end this impasse with Commerce Minister Shahrani now in 
Washington. We will also look to raise the issue with Foreign 
Minister Spanta.  End summary. 
 
¶2. (SBU)  Chief APTTA Negotiator Farhadi told ECONCOUNS Oct. 4, that 
the Pakistan side had formally requested the upcoming fourth round of 
APTTA talks in Kabul be postponed until Afghanistan's Foreign 
Minister notifies Islamabad that the re-export/smuggling study will 
"go ahead as planned and be incorporated into the APTTA."  Farhadi 
said he is disappointed because the decision sets back the talks, but 
added the lost time could be made up if the impasse is quickly 
bridged with the Foreign Ministry. 
 
Strategic Trade-Off:  the Wagah Crossing and Re-exports 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶3. (SBU)  Farhadi said the postponement may be a blessing in disguise 
since it gives both sides a chance to "get the issue right."  He 
repeatedly stressed that omitting the re-export study from the APTTA, 
currently embodied only as a textual footnote, could compel the 
Pakistan side to withdraw its bracketed APTTA language on the Wagah 
border crossing.  Such an outcome would set the talks back further 
and could be leaked to the press, aiding hard-liners on both sides 
opposed to making any concessions concerning re-exports and Indian 
market access. 
 
¶4. (SBU)  Farhadi said Pakistan's chief negotiator had already 
privately committed to a five-year transitional period giving 
Afghanistan unimpeded truck access to the Indian market -- but only 
in exchange for Afghanistan's compliance with the re-export study's 
recommendations, something that would be completed after the APTTA is 
signed.  The Pakistan side needed the re-export study, he explained, 
to ensure Indian goods are not re-exported back into Pakistan from 
Afghanistan.  Farhadi opined that Pakistan is not seriously concerned 
with Western goods being re-exported into Pakistan from Afghanistan, 
but wants safeguards in place to prevent Indian goods from being 
smuggling into Pakistan and giving the Indians an export advantage 
without liberalizing overall trade flows. 
 
Multi-year Plan to Open the Wagah Border 
- - - - - - - - - - - - - - - - - - - - 
 
¶5. (SBU)  In return for Afghanistan's full compliance with the 
re-export study's recommendations, Pakistan would: 
 
--in Year One of the APTTA going into effect, permit Afghan trucks 
unimpeded access to the Pakistan side of the Wagah border. 
 
--in Year Two, permit Afghan trucks unimpeded access to the Indian 
side of the Wagah border. 
 
--in Year Three, permit Afghan trucks to return from India with 
certain Indian goods. 
 
--In Year Four, permit Afghan trucks to return from India with an 
expanded number of Indian goods. 
 
--In Year Five, grant Afghanistan full access to India in terms of 
transport and Indian imports. 
 
Potential Solution:  "Separate Protocols" 
- - - - - - - - - - - - - - - - - - - - - 
 
¶6. (SBU)  Farhadi rejected the idea of separate side-letters 
addressing the Wagah/re-export issues because such a modality is not 
legislatively approved but constitutes an executive branch commitment 
that can be more easily modified.  Nonetheless, he said he is open to 
introducing the notion of "protocols separate from but parallel with 
the APTTA" -- as long as they are approved by both parliaments and 
 
KABUL 00003102  002.2 OF 002 
 
 
thus enforceable as international agreements. 
 
¶7. (SBU)  Farhadi's stated preferred course is to convince the 
Foreign Ministry to reverse its position on the re-export study. 
Short of that, he would turn to the protocol option, if it resonates 
with the Pakistan side. 
 
Next Steps 
- - - - - 
 
¶8. (SBU)  Farhadi repeatedly stated the APTTA issue does not receive 
careful Presidential review because other issues, notably the 
election outcome, "crowd it out."  Despite these difficulties, 
Farhadi states he remains confident the fourth round could be held 
November 17-18, if the current impediments are overcome, and that the 
two sides can conclude the APTTA by the end of 2009. 
 
¶9.  (SBU)  United States officials can usefully encourage Commerce 
Minister Shahrani (visiting Washington October 4-9) to continue 
seeking a creative solution (such as "separate but independent 
protocols") to address the impasse with the Foreign Ministry.  We 
will also look to meet soon with Foreign Minister Spanta and engage 
him on the need to move forward. 
 
Eikenberry