ECONOMIC DIPLOMACY AND PAKISTAN’S FOREIGN POLICY: ANALYZING TRADE RELATIONS IN THE POST-2021 AFGHAN SCENARIO

Abstract

The political changes that happened in Afghanistan post 2021 have been largely affecting the foreign policy priorities of Pakistan making more emphasis on economic diplomacy as a strategic instrument to enhance the bilateral trade ties. The paper examines how the trade between Pakistan and Afghanistan is changing with special focus on the formal and informal trade flows, socio-economic impacts, and policy institutional frameworks in the post-Taliban environment. The results show that despite the favorable balance of trade, the country is facing continuous issues including informal cross border trade, inefficiency in border management and poor infrastructure that hinder the effectiveness of the regulations and prevents a fair distribution of the economy. The current institutional frameworks, such as Afghanistan Pakistan Transit Trade Agreement (APTTA), China Pakistan Economic Corridor (CPEC) connectivity projects, and regional forums, such as ECO and SAARC, are very helpful in establishing orderly trade and stability in the region. It suggests that the research plan includes enhancing formal trade systems, improving systems of border control, encouraging inclusive economic engagement, and using economic diplomacy in strategic pursuit of larger political and regional interests. Pakistan is able to maximize the economic benefits without compromising stability of the bilateral relationship with Afghanistan in the long run through adoption of coordinated and sustainable policies related to trade. The study has provided useful policy suggestions that help to balance trade growth and regulatory governance and socio-economic development.