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United States, Afghanistan Conclude Trade and Investment Council Meeting

November 08, 2010

Washington, D.C. — The fifth meeting of the United States-Afghanistan Trade and Investment Framework Agreement (TIFA) Council, took place today in Washington, D.C. The meeting was opened by Assistant United States Trade Representative Michael Delaney and Minister Anwar-ul-Haq Ahady of the Ministry for Commerce and Industries for Afghanistan. The Parties exchanged views on the growing commercial and investment ties between the United States and Afghanistan. The Council meeting included a session with private sector stakeholders to highlight opportunities brought about by the TIFA. That session was attended by representatives from the private sector, including members of the Afghan-American Chamber of Commerce, the American Chamber of Commerce in Afghanistan, and members of the United States Trade Representative’s advisory committees.

The TIFA process focuses on identifying and taking steps to address barriers to trade and investment. The Council meeting covered five areas: 1) a review of implementation of follow-up actions from previous TIFA meetings; 2) a discussion of support and capacity-building for trade and investment; 3) an exchange of views on strengthening regional trade integration; and 4) a discussion of other issues that are important to trade, including labor rights, Afghanistan’s application to accede to the World Trade Organization (WTO) and investment in service industries.

Particular emphasis was placed on identifying the impediments to commercial opportunities. The Afghanistan delegation provided information on trends in trade and investment during the past year. Despite security concerns, Afghan entrepreneurs are increasingly identifying marketing opportunities for exports, including rugs, marble, fruits and seeds. Furthermore, the Afghanistan government has passed seven of the ten core commercial laws needed to regularize international trade and advance Afghanistan’s WTO accession process.

The United States delegation presented information about ongoing assistance to bolster trade and investment opportunities. USAID’s Investment Promotion Partnership is an assistance program with a budget of 75 million. This program will bring Afghan entrepreneurs to U.S. trade shows, assist with meeting U.S. Sanitary and Phytosanitary standards, and assist Afghanistan in improving its trade and investment environment.

Investment issues received extensive review in this year’s meeting. Afghanistan has made substantial progress toward providing services in many arreas of the country, increasing education for a skilled work force, and expanding opportunities for women entrepreneurs.

The Overseas Private Investment Corporation briefed on its ongoing Afghanistan programs, emphasizing its willingness to find flexible ways to support U.S. investors entering the market. After Minister Ahady briefed the TIFA Council on Afghanistan’s preparations for an upcoming WTO working party meeting on Afghanistan WTO accession, USTR discussed WTO accession procedures and technical assistance that can be offered to assist Afghanistan.

Minister Ahady discussed Afghanistan’s Trade Facilitation Zones (TFZs), including synergy by combining the TFZ concept with work on strengthening small- and medium-sized enterprises. USTR provided an update on the status of legislation that would establish Reconstruction Opportunity Zones in Afghanistan and Pakistan.

The TIFA Council also discussed the growing number of initiatives aimed at taking advantage of Afghanistan’s central location in South Asia by expanding road and rail linkages, improving customs and border processing, and reducing the transaction costs of cross-border movement. Participants discussed the first steps taken by Afghanistan to implement the newly ratified Afghanistan-Pakistan Transit Trade Agreement. Both sides touched upon a proposal to work toward a new Silk Road Initiative that would take advantage of Afghanistan’s central geographic location.

The World Bank provided a briefing on the results of the 2011 Doing Business Better Report regarding the ease of completing business transactions from start-up licenses to the end of a business. Both delegations exchanged views on the outcome of the Regional Economic Cooperation Conference on Afghanistan recently held in Istanbul, Turkey, as well as the findings from the October 2010 Central Asian Regional Economic Cooperation ministerial in Cebu, the Philippines.

The Afghan-American Chamber of Commerce held its annual matchmaking event in Washington, D.C. at the same time as the TIFA Council meeting. In the afternoon, participants from the matchmaking event joined the TIFA Council meeting to discuss their experience doing business in Afghanistan. Although security remains an important concern, the private sector representatives emphasized that the Afghan economy is rapidly growing and providing expanded trade and investment opportunities for both U.S. and Afghan interests.