Wednesday , November 25 2020
Breaking News
Home / Op-Ed / Editorial / Dilemma of trade deficit
Dilemma of trade deficit

Dilemma of trade deficit

The government is doing all the lip-service according to its capacity to ensure the nation that it is ready to burn midnight oil to increase the export of value-added goods and besides exploring new markets, it is also signing free trade agreements with various countries of the world for the purpose.  However, in the wake of double-digit growth in imports and continuous decline in exports, the trade deficit has widened up to 28.7 percent during the first seven months of the current fiscal year. The latest trade figures show that the country has crossed its limits of trade deficit and registered a deficit of $17.42 billion during the period in review which is equivalent to 85 percent of the annual target. If this trend continues, the country will likely to have over $4.5 billion annual current account deficit as exports remained less than half of the annual target during the last seven-month and imports remained two-thirds of the annual projections.

The ministry of commerce is holding talks with Thailand in March to sign free trade agreement while the two sides have already completed a draft of agreement and discussed tariff reduction modalities. The talks with Thai authorities have been going on since September 2015, held six round of talks, and still could not remove the trade barriers coming in the way of the agreement. Regarding a free trade agreement with Turkey, the two sides have completed five rounds of talks to remove trade barriers, but could not announce a deadline to sign the agreement. On another note, the expenses of negotiations and visits are continued to be borne by the taxpayers in the country. Again, fine words butter no parsnip. The talks between Pakistan and South Korea remained inconclusive so far on the matter of a free trade agreement between the two. The sides are now exploring the possibilities of an agreement by agreeing to hold a joint feasibility study. As a matter of fact, the government is not paying attention to provide relief to the local industry which has been struggling for its survival for the last several years. The energy crisis still persist despite the fact the current government has consumed three and half years of tenure. The problem is that it is still far from talking a proactive approach to overcome crisis.

Unless the government improves internal economic situation, the agreements with foreign countries will be a futile exercise. The government will have to improve energy supply, lower tax rates, increase tax base and crush terrorism for the revival of the economy.