VZCZCXYZ0000
PP RUEHWEB

DE RUEHBUL #3480/01 3050953
ZNY CCCCC ZZH
P 010953Z NOV 09
FM AMEMBASSY KABUL
TO RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 8054
RUEHC/SECSTATE WASHDC PRIORITY 2678

C O N F I D E N T I A L KABUL 003480 
 
SIPDIS 
 
STATE FOR S/SRAP, SCA/A AND EEB/BTA 
STATE PASS USTR FOR DELANEY AND DEANGELIS 
 
E.O. 12958: DECL: 10/31/2019 
TAGS: ETRD EAID PREL PK AF
SUBJECT: PAVING THE WAY FOR ACCEPTANCE OF THE APTTA 
UNAUTHORIZED TRADE STUDY 
 
REF: KABUL 3391 AND PREVIOUS 
 
Classified By: Acting CDDEA Robert F. Cekuta for Reasons 1.4 (b) and (d 
). 
 
¶1. (C) Summary:  Afghanistan,s chief negotiator for the 
Afghanistan-Pakistan Transit Trade Agreement (APTTA), Adib 
Farhadi, talked to EconOffs Oct 29 regarding the recent flap 
resulting from the Afghan MFA,s foot-dragging on 
transmitting the terms of reference for the study on 
unauthorized trade.  He has also picked up from the Pakistani 
embassy in Kabul that Islamabad wants to hold off on talks 
pending the results of the elections and seeing who the 
Afghan ministers are.  At this point, Farhadi doubts the 
Pakistanis will participate in the meetings scheduled for 
November.  The Chief negotiator also talked about the study 
of unauthorized trade, noting it is important that there be 
something in it that each side does not like for it to be 
perceived as impartial and that it be conducted in a way that 
neither side is seen as influencing the experts preparing the 
study or its outcome. End Summary. 
 
¶2. (SBU) Deputy Economic Counselor and USAID Economic Growth 
Deputy Director met October 29 with Adib Farhadi, who leads 
the GIRoA side in the negotiations for a transit trade 
agreement with Pakistan.  In addition to reviewing the status 
of the negotiations, Farhadi discussed the proposed study on 
unauthorized trade, which has been a sticking point. 
 
Unauthorized Trade Study Must be Seen as Unbiased 
- - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶3. (C) Farhadi said the credibility of the study into 
unauthorized trade, i.e., smuggling, will lie in making "both 
sides unhappy."  If either government is pleased with the 
study results, the other will not accept it, Farhadi said, 
and added the issue of unauthorized trade is so fraught with 
political and historic overlays that neither government will 
accept the study,s recommendations without some protest and 
criticism.  He predicted at least some criticism of the U.S. 
since we are funding the study.  However, he also predicted 
both Afghans and Pakistanis would jointly implement 
recommendations as long as they perceive the prescribed 
remediation as equitable, objective, and fact-based.  Farhadi 
emphasized neither side should be able to charge the other as 
influencing the study's results, and noted this would include 
avoiding perceptions of either party meeting too frequently 
with the experts writing the study and its recommendations. 
 
¶4. (C) Farhadi believes Japanese-manufactured high-end 
electronics make up the bulk of the unauthorized trade.  He 
also reiterated that Pakistanis fear if Afghanistan secures 
access through Wagah to India, Indian products would be 
diverted through unauthorized trade back into Pakistan and 
compete with Pakistan,s domestic products.  He predicted a 
three to five year horizon for implementing the study,s 
recommendations and placed great importance on the 
effectiveness/operational ability that line ministries will 
require to implement the recommendations. 
 
Pakistan May Delay Round Four 
- - - - - - - - - - - - - - - 
 
¶5. (C) Farhadi re-iterated doubts Pakistan would commit to 
attend a November negotiating round.  Pakistani negotiators, 
as well as the Pakistani Ambassador to Kabul, have informally 
told him the GOP wants to wait for the Afghan election to be 
resolved and new ministers in place.  According to Farhadi, 
he urged the GOP reps to negotiate in November to resolve the 
remaining issues that need to be resolved at the technical 
level.  For example, he said the two sides have not yet begun 
negotiating the transportation chapter, which he expects will 
take two sessions to complete.  Farhadi added he has 
informally discussed a follow-on negotiating round the second 
week of December with Pakistani lead negotiator Said Bashir. 
 
Thorns in the Negotiations 
- - - - - - - - - - - - - - 
 
¶6. (C) Referring to the Afghan MFA,s recent delayed 
transmittal of the unauthorized trade study's Terms of 
Reference (TOR), Farhadi said he had used up much of his 
personal political capital arguing with MFA Minister Spanta 
to let the TOR go forward.  He said the MFA is not well 
versed in economic issues, yet wants to control international 
trade negotiations, including APTTA.  He noted the MFA is not 
in favor of Afghanistan joining the WTO and Farhadi largely 
attributed the APTTA's recent lack of progress to the MFA's 
roadblocks.  Farhadi said relations between Minister Spanta 
 
and the Pakistani Ambassador to Kabul are so bad that Spanta 
will not meet with the Ambassador.  According to Farhadi, 
these poor relations also factor heavily into the Pakistan,s 
desire to delay negotiations.  The Pakistanis expect a new 
Foreign Minister will be named, based on the 
widely-circulated rumor Spanta does not wish to remain in 
place, Farhadi said. 
 
 
EIKENBERRY