The Trade Isolation Of Afghanistan: Exploring Membership Prospects In A Globalized World

Afghanistan has been a member of the World Trade Organization (WTO) since 29 July 2016. Afghanistan is also a member of several other international organizations, including the United Nations, the International Monetary Fund, the World Bank, the South Asian Association for Regional Cooperation (SAARC), the Central Asia Regional Economic Cooperation (CAREC), the Economic Cooperation Organization (ECO), and the Organization for Security and Co-operation in Europe (OSCE), of which it is a Partner for Cooperation.

Afghanistan joined the World Trade Organization in 2016

Afghanistan joined the World Trade Organization (WTO) in 2016, becoming the 164th member on 29 July. The country's application was approved by WTO member states at the end of 2015, and the terms of accession were agreed upon by the Afghan government and the WTO's 161 members on 11 November 2015.

The process of Afghanistan's accession to the WTO was a lengthy one, taking almost 11 years of negotiations. The country first applied for membership in 2004, a year after the new regime was established under the leadership of Hamid Karzai. A working party was then established, consisting of 28 countries, including China, Pakistan, Tajikistan, India, Japan, Russia, Saudi Arabia, and the European Union. Afghanistan presented its Trade Policy Memorandum in 2009, and the finalized report was presented to the WTO in November 2015.

Afghanistan's membership in the WTO was expected to bring about economic benefits, including access to new markets and global supply chains. It was hoped that this would help to revive the struggling Afghan economy, which had experienced a slump in growth, a decrease in foreign direct investment, and deteriorating business conditions.

However, there were also concerns about the potential negative impact of WTO membership on newly emerged domestic industries, which may struggle to compete with foreign industries due to the reduction of tariffs on importing goods.

In addition to the WTO, Afghanistan is also a member of other international trade organizations, including the South Asian Association for Regional Cooperation (SAARC), the Central Asia Regional Economic Cooperation (CAREC), and the Economic Cooperation Organization (ECO).

Afghanistan is a member of the International Monetary Fund

In 2001, Afghanistan's infrastructure and institutions were in disarray due to years of conflict and erratic policies. The IMF got involved in Afghanistan in 2002 to assist in rebuilding economic institutions and providing advice to the government on economic policies and reforms. The IMF has since been providing technical assistance to develop monetary instruments, strengthen the central bank, modernize foreign exchange regulations, revamp tax and customs administration, establish a fiscal regime for the natural resources sector, enhance public financial management, and improve the national accounts, and price and balance of payments statistics.

The IMF's first program during 2006-2010 was successful in maintaining macroeconomic stability and promoting reform. Under the second three-year arrangement, which started on November 14, 2011, macroeconomic stability was preserved but reform implementation slowed.

In 2014, Afghanistan completed the first peaceful transfer of power in its recent history, raising hopes and signaling the Afghan people's desire for change. The international community and key donors reaffirmed their partnership and commitment to Afghanistan's future. They welcomed the new government's commitment to macroeconomic stability and reforms for sustainable and inclusive growth.

However, political and security uncertainties have weighed on economic performance, weakening confidence and slowing growth. Despite these challenges, Afghanistan has maintained macroeconomic stability, implemented structural reforms, and built policy buffers with the support of the IMF and donors.

Afghanistan is a member of the World Bank

Afghanistan is a member of several international trade organisations, including the World Trade Organization (WTO) and the World Bank.

Afghanistan joined the WTO in 2016, and this membership has helped to open up the country to international trade. The World Bank reports that Afghanistan's exports totalled USD 1.9 billion in 2023, a slight 0.4% increase from the previous year. The country's main exports include low-value items such as dried fruit, carpets, cotton, cereals, and non-alcoholic beverages. Afghanistan's largest export destinations are Pakistan and India, which together account for 85% of exports.

In addition to the WTO and the World Bank, Afghanistan is also a member of the International Monetary Fund, the United Nations, and the Central Asia Regional Economic Cooperation (CAREC). Afghanistan is also a Partner for Cooperation with the Organization for Security and Co-operation in Europe.

These memberships have helped Afghanistan to develop its economy and integrate into the international economic system.

Afghanistan is a Partner for Cooperation with the Organization for Security and Co-operation in Europe

The OSCE has a comprehensive approach to security, addressing politico-military, economic and environmental, and human aspects. It aims to prevent conflicts, facilitate lasting political settlements, and assist in the rehabilitation of post-conflict areas. The organization also promotes human rights, freedom of the press, and free and fair elections.

As a Partner for Cooperation, Afghanistan has participated in OSCE's Asian Conference, which includes Australia, Japan, South Korea, and Thailand. In 2004, the OSCE sent a team to offer technical support for Afghanistan's presidential election, and in 2005, it sent an election support team for the country's parliamentary and provincial council elections.

In addition to the OSCE, Afghanistan also belongs to other international organizations, including the United Nations, World Trade Organization, World Bank, and the International Monetary Fund.

Afghanistan joined the Trade Facilitation Agreement in 2016

Afghanistan has been a member of the World Trade Organization (WTO) since 29 July 2016. The country formally accepted the WTO's Trade Facilitation Agreement (TFA) on the same day.

The TFA is a legally binding agreement that commits Afghanistan to improving the transparency, predictability, fairness, and efficiency of its cross-border trade environment. The agreement is designed to streamline the process of trading across borders, lower import and export costs, and boost the competitiveness of Afghanistan's private sector.

The Afghan government demonstrated its strong commitment to the TFA by working with the private sector to implement the agreement with support from the European Union (EU) and the International Trade Centre (ITC). A three-day workshop was held in Kabul in May 2018 to discuss and prioritize reforms related to the TFA. As a result of the workshop, the Inter-Ministerial Committee on the WTO & Trade Facilitation drafted a Work Plan identifying high-priority reforms, constraints, and key measures to be adopted in the short and medium term.

Afghanistan's accession to the WTO and its acceptance of the TFA are significant steps towards the country's integration into the international economy and its efforts to improve its trade policies and competitiveness.

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