Describes bilateral and multilateral trade agreements that this country is party to, including with the United States. Includes websites and other resources where U.S. companies can get more information on how to take advantage of these agreements.
Last Published: 4/17/2016
The Government of Afghanistan has signed 31 bilateral trade and investment agreements and memoranda of understanding, 10 bilateral economic agreements, and five tripartite agreements.  Among these agreements are bilateral Trade and Economic Cooperation Economic Cooperation Agreements with Russia and Turkey, a Bilateral Reciprocal Promotion and Protection of Investments Agreement with Turkey, a Bilateral Preferential Trade Agreement with India (superseded by SAFTA – see below), and a Bilateral Investment Treaty with Germany. 
 
Afghanistan has signed a bilateral Investment Incentive Agreement with the United States to encourage and protect investment activities in Afghanistan through the provision of insurance and investment guarantees under the OPIC program.  In 2004, a Trade and Investment Framework Agreement (TIFA) was signed with the United States which established a framework to discuss economic relations between the U.S. and Afghanistan.  Since that time, there have been annual meetings of the United States – Afghanistan Council on Trade and Investment, established under the auspices of the TIFA, to further the bilateral cooperation needed to achieve Afghanistan’s goals of creating an environment conducive to economic reform, private sector development and trade expansion.
 
The Afghanistan – Pakistan Trade and Transit Agreement (APTTA) came into force on June 12, 2011.  The purpose of the agreement is to facilitate the movement of goods between and through the respective territories of the signatories.  The main provisions of the agreement include freedom of transit through the territory of each contracting party via pre-defined routes; facilitation of clearance procedures; establishment of technical requirements for admittance of road vehicles and drivers; and elimination of customs duties and taxes on all goods in transit and means of transit and transport regardless of destination or purpose.
 
Afghanistan is a member of the Economic Cooperation Organization (ECO, 1993) and the Central Asia Regional Economic Cooperation (CAREC, 2005).  It became a full member of the South Asian Association for Regional Cooperation (SAARC) in the spring of 2007. 
 
In January 2011, President Karzai signed the Agreement for the South Asia Free Trade Area (SAFTA), a free trade agreement among Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.  Afghanistan became a full member of SAFTA on August 7, 2011.  Under SAFTA, Pakistan, India and Sri Lanka will be required to lower tariffs immediately on many Afghan exports, with the other SAFTA countries (Bangladesh, Bhutan, Maldives, and Nepal) to follow suit over a five year period.  Under SAFTA, Afghanistan currently has duty free access to India for all traded goods except cigarettes and alcohol (which is prohibited anyway) and pays duties of 5 percent to Pakistan on non-sensitive goods.  Afghanistan developed and notified SAARC members of its tariff reductions in August 2011.  The schedule reduces customs duties for non-sensitive goods from the original rates down to 5 percent in equal installments over a period of 10 years (August 2011 to August 2021).  See Afghanistan’s current tariff schedule:  http://customs.mof.gov.af/Content/files/Afghanistan-HS-2012-English-version.pdf for current rates. 
 
Afghan products enjoy duty free and quota free access under an LDC Market Access Initiative with Canada and a Generalized Preferences Treatment agreement with Japan. Afghan products also enjoy an “Everything But Arms” (EBA) agreement with the European Union.  As a least-developed country, Afghanistan is eligible for duty-free access to the U.S. market for approximately 5,700 products under the Generalized System of Preferences (GSP) program.
 
Afghanistan applied to the World Trade Organization (WTO) and became an observer in 2004 and is in the process of accession.  While all bilateral negotiations have closed, the country must also enact extensive legal reforms (more than 30 new laws and regulations) to bring its trade regime into compliance with WTO agreements.  

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Afghanistan Trade Development and Promotion Trade Agreements