Afghanistan's accession to the World Trade Organization has the potential to transform the Afghan economy, but reform won't happen overnight. Ahmad Jawed Sakhi and Arielle Berghammer-Ziegler outline crucial next steps.

Accession to the World Trade Organization (WTO) for Afghanistan, a country in dire need of connectivity with the rest of the global economy, is a noteworthy accomplishment. Yet accession is a means to an end, not the end goal itself. This end goal is a vibrant economy bolstered by strong trade relationships and access to export markets for Afghan goods and services. Since the inception of the WTO, many countries have rallied together to create a streamlined process for conducting trade with one another. To fully benefit from membership in this community and access these new markets, Afghanistan must continue to build on its hard-earned reforms. So, what’s next for Afghanistan on its post-accession path?

WTO Enforcement and Compliance

With its porous borders and complicated relationships with neighboring countries, enforcement continues to be a pressing issue in Afghanistan. The challenges of enforcement need to remain a priority as Afghanistan continues to move forward in post-WTO accession reforms if the country is to harness the potential benefits from WTO membership, such as increased trade. It is essential that the government of Afghanistan works to build and strengthen technical teams with stakeholders from around the country — including the private sector and operators at transport corridors — to work toward compliance with WTO treaties and agreements. These technical teams will be responsible for ensuring that all requirements and safety standards are met, such as the application of sanitary and phytosanitary measures, a critical step for a country seeking to export agricultural goods.

Afghanistan’s long-standing and complex relationship with Pakistan cannot be dismissed, but it is important to recognize that Afghanistan has already taken steps to diversify its trading partners by entering into transit agreements with other neighboring countries. The new WTO membership will further strengthen Afghanistan’s integration into the international community and temper reliance on its eastern neighbor. As the modern Silk Road initiative expands and regional players seek to develop increased economic partnerships, this is an excellent time for Afghanistan to position itself as a valuable trade and transit partner and demonstrate ability to follow through on required reforms and improvements to allow for the efficient flow of goods. WTO accession raises the bar and gives international trade relationships a new level of importance for Afghanistan.

Using the WTO as Momentum for Meeting Other International Standards for Trade

One particular area that could benefit from attention is compliance with the International Road Transport (TIR) system. TIR is an international transit customs system, established by the United Nations that eases the movement of goods across borders, if those goods are being transported by road. The TIR system is particularly crucial for Afghanistan, as it is a landlocked country situated in a complex political climate that is largely dependent on limited, domestic transit mechanisms to move cargo. It allows Afghan exporters to cut down time spent on the road. The procedure is streamlined, requiring less physical inspection. In addition, streamlined processes and compliance allow other countries to transport their goods throughout Afghanistan without unnecessary hurdles.

Although not directly linked to the WTO, TIR compliance is another way for Afghanistan to effectively meet some of the WTO’s trade facilitation agreement (TFA) requirements. However, for Afghanistan to reap the benefits of TIR conventions and new agreements like the Central Asia Cross Border Transit Agreement or the South Asia Free Trade Agreement, it also needs well-run and properly guided customs and tax systems. The government of Afghanistan and experts on post-WTO accession need to commit to regular compliance and regulatory meetings to ensure progress is being made. A regime compliant with TIR conventions would be a fundamental step for turning the country into a transit and trade hub.

Customs Reforms

For Afghanistan to be effective in trading with its neighbors in the near future, and with the rest of the world in the longer term, it needs to prioritize customs reforms. Afghanistan has made significant progress in customs reforms, but the customs system is still not comparable to international standards. This hinders Afghanistan’s ability to comply with TIR and the WTO Trade Facilitation Agreement — making it unable to enjoy faster, more reliable trade relations with its partners. These shortcomings also lead to a significant loss in revenue, as ineffective systems allow for unpaid taxes, customs dues, and rampant corruption. Development actors, such as USAID’s Afghanistan Trade and Revenue project, supported the government of Afghanistan in laying a strong foundation for an effective customs regime by refining bylaws and developing legislation, which helped the Afghan customs department improve its risk management system, but this is only the beginning. The sustainability of trade initiatives requires continued monitoring and dedicated technical resources. For Afghanistan to grow its economy and be recognized as a legitimate international trading partner, these steps are non-negotiable.

Looking to the Future

In the years to come, the country will continue to work toward meeting WTO member obligations by improving internal systems and processes. By continuing to engage in dialogue and negotiations with neighboring nations and other WTO member countries, Afghanistan will expand trade opportunities for the Afghan people. Gaining access to the WTO and the benefits that come with such membership is only one step in Afghanistan’s quest to improve the economic conditions of the nation and increase opportunity for all citizens. In order to capitalize on the potential this new membership offers, Afghanistan needs to use the WTO as momentum for further reforms.