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Pakistani-Afghan trade deal announced during Clinton visit

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By Karen DeYoung
Washington Post Staff Writer
Sunday, July 18, 2010; 4:05 PM

ISLAMABAD -- Like an anxious matchmaker nudging a nervous couple together, the Obama administration has persuaded Afghanistan and Pakistan to take their first tangible step toward bilateral cooperation -- a trade agreement that will facilitate the ground shipment of goods between and through the two countries.

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The accord has been under negotiation for years; Afghan President Hamid Karzai and Pakistani President Asif Ali Zardari promised President Obama more than a year ago that it would be completed by the end of 2009. During marathon talks between the two sides that began last week, U.S. officials helped forge a deal in time to announce it Sunday night, just hours after Secretary of State Hillary Rodham Clinton arrived for a two-day visit.

On Monday, Clinton and the Pakistanis will unveil their own bilateral agreement to spend an initial $500 million in new U.S. economic assistance to Pakistan. Primarily for water and energy projects, the aid is part of a $7.5 billion, five-year development package approved by Congress last fall.

The trade and aid agreements are part of the administration's ongoing efforts to facilitate President Obama's struggling Afghanistan war strategy. It hopes that a long-term investment here, along with repeated visits from senior officials, will convince Pakistan to more solidly align its own interests with those of the United States.

Most immediately, it would like the Pakistani military to take more aggressive action against Taliban groups that use Pakistan as their headquarters and base of operations for attacks into Afghanistan. The groups, including the Haqqani network based in the Pakistani tribal areas along the Afghan border, and the Quetta Shura based in the southern province of Baluchistan, have historically close ties with Pakistan's Inter-Services Intelligence directorate.

Following the failed Times Square bombing attempt in May, U.S. intelligence concluded that confessed bomber Faisal Shahzad had been trained and directed by the Pakistani Taliban, a domestic extremist group allied with those active in Afghanistan. Administration officials warned Pakistan that a successful attack in U.S. territory emanating from Pakistan would have a "devastating impact on our relationship," Clinton said in an interview with the BBC Sunday. "I worry about it all the time, and so do the Pakistanis," she said.

Islamabad is at least as important as Kabul, Richard C. Holbrooke, the administration's special representative for Afghanistan and Pakistan, said Sunday. Pakistan is "one of the most critical countries in the world."

Historical adversaries Pakistan and India have long competed for influence in Afghanistan, and the administration has tried to juggle its own relations with the three while encouraging resolution of differences among them. Over the past year, it has pushed for dialogue between Islamabad and Kabul as part of its war effort. The new trade accord, an expansion of a limited agreement signed in 1965 and the subject of sporadic and unsuccessful negotiations since then, will boost Afghan exports by regularizing customs and transit permit arrangements, giving Afghanistan easier access to Pakistani sea ports and allowing Pakistan greater access to Central Asia.

Afghan trucks, which have had to offload goods onto Pakistani vehicles on their joint border, will now be able to deliver goods directly to Pakistani destinations and ports, and to travel across Pakistan to the Indian border, where they will be offloaded onto Indian trucks. Full cross-border transit has been put off until Pakistan and India resolve their own differences.

Administration officials have been divided on other aspects of Pakistan-Afghanistan cooperation, including the prospect that Karzai, with Pakistani encouragement, might move too quickly to cede political power to the Taliban that they have not won on the battlefield.

Both governments have grown leery of the strength of the U.S. commitment, concerned about waning popular and political support for the war in the United States, and Obama's pledge to begin troop withdrawals in July, 2011.

Clinton will travel from here to Kabul to attend a conference where Karzai is expected to announce concrete plans for reintegration of low-level Taliban fighters, anti-corruption plans, a new community defense program and other initiatives that the international community has agreed to fund.

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