Pak-Afghan bilateral agriculture trade: challenges and opportunities

Abstract

The hub of the Muslim world and Central Asian countries, Afghanistan, and Pakistan, have many trade agreements. Both countries share a long history as agricultural trading partners since 1969. The study was designed to investigate the challenges and opportunities for increasing bilateral trade. For research purposes, Peshawar in Pakistan and Jalalabad in Afghanistan were selected. The research data were collected through purposeful sampling techniques, and the appropriate sample size followed a systematic procedure. Data were analyzed using statistical methods to yield further results. The study employed the Gravity Model, Descriptive Statistics, Ordinary Least Square Method, and Correlation to describe its findings. Specifically, a modified Gravity Model of bilateral agriculture trade was applied to analyze trade flows between Pakistan and Afghanistan. The study's results demonstrated that major determinants of Pak-Afghan total trade flow include distance, GDP per capita, transportation, taxes, and the population of both countries. The findings revealed that a higher GDP per capita leads to increased trade, distance acts as a trade deterrent, and historical ties, such as being former members of the same country, have future implications for more trade compared to otherwise similar countries.