The move by Afghanistan is an economically significant political decision (Shutterstock)

The Afghan government has unprecedentedly announced the suspension of all trade with Pakistan, which is seen as a major shift in Kabul's economic policy and a "strong signal" to Islamabad.

The decision includes banning the import of food, construction materials and manufactured goods, including Pakistani medicines. Previously, Pakistani medicines accounted for more than 40% of Afghanistan's medicine demand.

This shift has sparked widespread discussions in the economic and political fields and is considered the boldest move so far because it will have a significant impact on both the Afghan and Pakistani economies, while also bringing new opportunities for the Afghan economy seeking to reduce its dependence on Pakistan and enhance trade independence.

Tensions between the two countries have been escalating since last month's deadly border conflict. Islamabad has threatened further action if attacks continue. Meanwhile, talks to ease tensions between the two countries remain stalled.

Strategic Decision

From a political perspective, Afghan observers believe that this move aims to send a strong signal to Islamabad, which had long relied on its geographical position as leverage. They consider this decision a carefully thought-out economic response that shifts the confrontation from the political realm to the economic one, which is unprecedented in the history of bilateral relations.

Economic expert Rahmatullah Pashthin told Al Jazeera, "This decision marks a strategic turning point in Afghanistan's economic history, transforming trade from a tool of dependence into a tool of sovereignty."

He believes that by redefining the regional balance through economic rather than political means, Kabul will bring multiple economic crises to Pakistan, leading to the closure of hundreds of factories in Pakistan. He also added that small and medium-sized enterprises dependent on the Afghan market would face the most direct impact.

Zahid Safi, an expert on export affairs in Pakistan, said in a phone interview, "About 20% of Pakistan's food and medicine exports go to Afghanistan. The sudden stoppage of exports will lead to unemployment for tens of thousands of people."

Kabul announces plans to reduce trade with Pakistan and diversify trade partners

Risks and New Prospects

Economic experts believe that although there are risks in the short term, this decision opens up new prospects for Afghanistan in terms of trade diversification and local production. The Afghan government has started taking measures to strengthen cooperation with Iran, Uzbekistan, Turkmenistan, and Tajikistan, and to expand the use of Chabahar Port and Abbas Port to replace Pakistani ports.

Former Afghan Trade Minister Anwarul Haq Ahadi told Al Jazeera, "Due to Pakistan's policies, the current government was forced to take this step. This shift will give Afghanistan geographical and strategic flexibility and reduce its reliance on a single channel. Pakistan is losing about 60% of the Afghan market."

Medicines First

Afghanistan needs about $1 billion worth of medicines annually, with over 70% of them imported. Pakistan is one of the main suppliers of medicines, with annual exports of ready-to-use medicines reaching $50 million to $55 million.

Afghan Vice President Maulvi Abdul Ghani Baradar stated, "All medicines imported from Pakistan should be redirected to other countries," and urged "traders to settle their accounts and commercial transactions with Pakistan within the specified time frame." He also added, "We have received complaints from the public regarding the poor quality and high prices of medicines."

Chairman of the Kabul Pharmaceutical Association, Abdul Rahman Nurzai, added, "The stoppage of Pakistani medicine imports has forced us to quickly find new alternatives. We have started negotiations with companies in Turkey, India, and Iran to ensure meeting local needs. This crisis might become an opportunity for Afghanistan to revitalize its pharmaceutical industry and reduce its dependence on foreign medicines."

Dozens of trucks are stranded on the Afghan side due to the closure of the Torgham border crossing by Pakistan (AP)

Trade Relations

Official data show that trade between Afghanistan and Pakistan in 2024 amounted to approximately $2 billion. Pakistan exported goods worth $1.39 billion to Afghanistan, while Afghanistan's exports to Pakistan were only about $600 million. For decades, Pakistan has been Kabul's largest trading partner, with its land routes being the main channels for Afghanistan's imports and exports.

However, Kabul's recent decision to suspend trade and transit has reversed this situation, effectively freezing a $2 billion export market. This not only causes direct losses to Pakistan's food, medicine, and construction material industries but also affects the supply of essential goods to the Afghan market, with over 40% of Afghanistan's important imports depending on Pakistan.

Former Deputy Minister of Commerce Muzammil Sinwari said, "This decision is not just a political move, but a strategic economic transformation that could reshape the trade dynamics in South Asia. Kabul is seeking alternative routes through Iran and Central Asia. Although this move has long-term benefits, it also carries risks of inflation and shortages of basic goods in Afghanistan in the short term."

This is the Khyber Pass, connecting the Pakistan-Afghanistan border, considered the lifeline of trade between the two countries (Shutterstock)

Denying Traders' Rights

Former Finance Minister Omar Zahidwal criticized the decision, believing it harmed the interests of Afghan traders and violated the rights of this landlocked country.

Zahidwal told Al Jazeera, "As a landlocked country, Afghanistan has the right, according to international agreements, to use Pakistan's ports and waterways. This right is not a favor given by Pakistan, but a legal right guaranteed by bilateral and multilateral trade agreements and laws."

He explained that refusing traders to use Pakistan's ports due to political tensions violates the principle of international transit freedom and emphasized that the government has a responsibility to defend this right and protect traders' interests, rather than 'forcing them to give up this right'."

Sources: Al Jazeera

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