Pakistan – Afghanistan Cross Border Trade Meeting

Key recommendations of Working Groups

Rapporteur: Asim Raza, Chairman PFMA Technical Fortification Committee- Pakistan

Millers and traders would like to:

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  Conduct a costing study;
  
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  Hold a regional meeting for fortification;
  
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  Ensure explicit inclusion of fortification;
  
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  Provide training to technical specialists
  
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  Strengthen technical and laboratory;
  
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  Develop and implement administrative resources;
  
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  Provide government subsidies to flour miller.s
  

Rapporteur: Anjum Sardar, Deputy Secretary Technical, Punjab Food Department - Pakistan

Government agencies and regulators made the following recommendations:

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  Standards for vitamin D3 in edible oils: PSQCA should add it at 3000 IU/kg;
  
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  Differing fortification standards in federal and provincial levels should be harmonized (PSQCA and Provinces);
  
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  Import tax for premix is very high and should be eliminated;
  
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  Government of Pakistan may also control the price of premix;
  
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  Product certification: Fortified products destined for Afghanistan should have a certificate from Inspections (Private and Public Sector) in Pakistan. This is the responsibility of Food Authorities/ PSQCA/PCSIR /accredited labs or certification bodies. Both countries should follow the same procedure;
  
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  Valid certificates should be issued by accredited labs. A list will be provided by the GOP;
  
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  Proper labeling / food specification should be mandatory: Certification / inspection bodies will be responsible for issuing mandatory labeling;
  
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  Exporter / Importer verification system: a strong M&E system should be implemented by both governments.
  

During the second session participants were quite interested in the methodology and way forward to introduce fortified wheat and edible oil to the market. The discussion was facilitated by Mr. Mohamed Mansour who designed the technical portion of the meeting.

The harmonization of the standards among Pakistan and Afghanistan was discussed among the Afghan delegation and PSQCA. They have also exchanged their standards.

Day 2 - Presentations and discussion

Chair: Dr. Shahzad Alam, Chairman, PCSIR

Chair: Muhammad Khalid Siddiq, Director General PSQCA

Co-chair: Mohammad Halim Ibrahimi, General Manager of Nutrition, Afghanistan Ministry of

Agriculture, Irrigation and Livestock (MAIL)

This session included four presentations and an address from the Chair to update the audience on the contribution and progress of PCSIR on food fortification in Pakistan. This was followed by a lively discussion.

Dr. Afzal described PSQCA’s role and strengths and the standards for food and agriculture. National Standards Committees were explained, as were the procedures used to establish the standards.

Pakistan’s standards for edible oil and ghee food fortification include mandatory addition of vitamin A 30,000 in oil and Ghee, while vitamin D is in being discussed. Standards for wheat flour fortification recommend NaFeEDTA at 10ppm. He described the need to improve the milling techniques to address the loss of 40% of wheat’s vitamins during the milling process.

Future action proposed regarding food fortification standards in Pakistan include:

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  Updating Pakistani standards so that the addition of Vitamin D value in edible oils is mandatory;
  

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  Monitoring/market surveillance of Oil (Vitamin A&D) and Wheat Flour (for iron) in collaboration with GAIN and provincial health regulators;
  
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  Facilitating adoption of Pakistan standards
  
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  Increasing industry and consumer awareness through effective media campaigns.
  

Dr. Ludin shared the current status of the standards established by the ANSA for wheat and edible oil fortification and described the standards of Iron’s intrinsic & extrinsic values in wheat. He described NaFeEDTA as a cost effective methodology. He called for more stakeholder involvement at country level create an enabling environment for production, import and export of flour, including legislation and tax exemptions. He recommended establishing country working groups, identifying country stakeholders, and establishment of a revolving fund for premixes.

After describing the principles guiding the addition of specific nutrients to foods (evidence-based need, official and/or mandatory decision, specific characteristics of the food vehicle and its consumption patterns, cost-effectiveness), Dr. Nassimi defined a number of concepts and measures used for the protection of public health, consumers and fair trade such as level of protection or “acceptable level of risk”, audit, certification, legislation, inspection, accreditation, risk assessment and risk analysis.

Mutually agreed requirements for trade between two countries or parties may consist of standards, provision for sampling, process controls, conditions of production, transport, storage, or a combination of these. He summarized the characteristics as:

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  Consistency of requirements of imported and domestic foods;
  
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  Clear definition of responsibilities of competent authorities;
  
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  Clear definition of legislation and operating procedures;
  
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  Giving precedence to the protection of consumers;
  
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  Clear definition of the food control systems applied in the exporting country;
  
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  Clear framework for import and export inspection and certification;
  
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  Recognition of equivalence of inspection and/or certification and facilitation by government of fair trade taking into consideration appropriate level of consumer protection.
  

He recalled a meeting in Almaty with Dr. Humayun Ludin and other important officials from Pakistan, Kazakhstan and Afghanistan where there was assent that CAR region countries look towards Pakistan as a major trade contributor. Pakistan has a responsibility to provide an enabling environment to the industry for fortification. Plans were also being made to fortify rice, pulses and other food commodities. The Government of Pakistan is committed to food fortification, and to move forward, we need to work together to create an ideal and uniform environment for food fortification.

Dr. Alam said that PCSIR has 16 laboratory complexes in Karachi, Lahore, Peshawar, Quetta and other cities. Testing procedures are important in enhancing trade with Afghanistan, and laboratories in Lahore, Peshawar and Quetta could be engaged in quality control and quality assurance test of food. PCSIR could even establish labs on Pakistan-Afghan borders and even in Afghanistan. He rendered full commitment for the food fortification project and re-asserted that we need to strengthen our trade with Afghanistan. He announced that PCSIR were about to complete the assignment of producing the premix as well as micro-feeders locally which will substantially reduce the cost of fortification. He committed that by the next meeting, PCSIR will be able to share the prices of local premix and micro-feeders.

Chair: Habibullah Assad, Afghanistan Focal point for WTO, and Trade Policy Advisor at Ministry of Commerce and Industry

Chair: Madam Roubina Taufiq Shah Director General Trade Dispute Resolution Organization, Ministry of Commerce, Government of Pakistan 

Co-chairs: Naeem Butt, Chairman, Pakistan Flour Mills Association (PFMA) and Asim Raza, PFMA, Chairman, Flour Fortification Committee

Mr. Mohammad Sulaiman presented data on exports of wheat flour and edible oils to Afghanistan in tonnage and dollar value derived from Altai Consulting and Synergy Advisory & Solutions Analysis, and from Trade Map. 28 flour mills accounted for 77% of total exports to Afghanistan (0.6 million MT), the remaining 23% was produced in small quantities by many other mills. Most exporting flour mills are located in Punjab and KPK provinces. Subsequently, Mr. Sulaiman explained the basic requirements for the export of food materials to other countries, including Afghanistan. Exporting companies should be registered with sales tax and income tax; should have a national Tax Number (NTN); and should be registered with the Chamber of Commerce.

Documents required for exports from Pakistan at export sites include:

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  Goods Declaration Form – GD I
  
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  Commercial Invoice
  
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  Certificate of Origin
  
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  Packing List
  
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  Form E
  
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  Export General Manifest (EGM)
  
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  Escort Letter
  
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  Weight Slip
  
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  Bilty
  

With regard to oil and ghee, Mr. Sulaiman indicated that 12 oil factories account for 81% of total exports to Afghanistan (154,000 MT, 90% of it in the form of vegetable ghee) based on 2014 customs data. Although export quotas exist and limit edible oil exports to Afghanistan to 4,000 MT maximum per refinery on a yearly basis, they are in practice not implemented and it seems that refineries export way above these quotas, notably because a significant share of edible oil production is unregistered and part of it is exported to Afghanistan. Mr. Sulaiman made the following recommendations to traders and exporters:

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  Web Based One Customs (Weboc) systems should be made operational on both border custom Stations Torkham and Chaman for export and import;
  
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  Bilateral trade statistics of both customs should be checked and updated to get correct figures in dollars;
  
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  Testing facilities for premixes should be developed in both customs stations at Torkham and Chaman, preferably in Pakistan as well as Afghanistan.
  

Dr. Massoud presented an analysis of the trade between the two countries with the top problem being smuggling or “unofficial trade” which is equivalent in dollar value to the official trade, causing losses of billion dollars to government budgets. He attributed evasion of duty taxes to direct government domestic economic and trade policies. While decreasing custom tariffs from Afghanistan had encouraged smuggling of consumer goods from Afghanistan to Pakistan for decades, Pakistan reversed its policy during the last decade encouraging smuggling and duty tax evasion. The advisor of the Afghan Chamber of Commerce identified major areas of smuggling between the two countries - food products, including wheat flour and edible oil, pharmaceutical materials, and lubricants. Smuggling of the first three products bear potential health hazards and financial threats because they are not subject to any health, sanitary and quality inspection.

Dr. Masood updated the participants about the regional harmonization of standards meeting held in Kazakhstan. Following that meeting, processes have been initiated in Pakistan concerning the revision of fortification standards based upon WHO guidelines and requirements in the region keeping in mind the level of micronutrient deficiencies in Pakistan. As Dr. Lodi had mentioned, earlier, we do not have the necessary fortification for Vitamin D and will be working with PSQCA and PCSIR for this soon. Thirdly, we have also initiated formulation of National Fortification Strategy for Pakistan in consultation with the partners as well as the provinces and very soon we will be incorporating all the suggestion.

Mrs. Shah, Director General of the Trade Dispute Resolution Organization explained that TDRO has administrative & adjudicating powers to take swift actions for resolution of international trade disputes. Among its objectives, TDRO aims to

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  Bridge the trust deficit between local and foreign businessmen;
  
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  Act as bridge between bodies responsible for standards and quality;
  

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  Improve quality standards;
  
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  Ensure foreign importers are not cheated by Pakistani exporters;
  
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  Prepare database of exporters with confirmed cases of disputes;
  
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  Provide assistance to Pakistani exporters defrauded in international trade;
  
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  Educate and train exporters / importers to avoid disputes.
  

Moderator: Mr. Daroo Khan, President Pak Afghan Joint Chamber of Commerce

Panel Members: Haji Agha, Afghanistan Trader/Importer Chair of south side of the country

Dawood Khan, Jamel’s Traders, Peshawar

Muhammad Taraq, Haq Bahoo Flour Mills, Peshawar

Rasool Khan, s/o Qacim from Kadir Mandi, Jalalabad

Khair Mohamed Rahmuden, trader, flour importer and Chair,Traders’ Committee

Abdul Bari, Trader Baluchistan

Ahmadi Mohammad Asif, Chairman Afghanistan Flour Traders Association (AFTA)

Discussion

At the end of the working group sessions, presenters from each working group shared their conclusions and proposed next steps.