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Issues in foreign trade

Issues in foreign trade

Pakistan is facing trade imbalance with various countries of the world and even could not reap the benefits of free trade agreements with China, Malaysia, Sri Lanka, Iran, Mauritius and Indonesia. According to a report of the Pakistan Business Council, the government policymakers have failed to secure access for several exportable items during the last 10 years and the country is still in a process to get tariff concessions. China has appeared as the main trade partner in recent years and the process of negotiations is going on to ink the second phase of the free trade agreement. The council believes in contrast to Pakistan, the member countries of the Association of Southeast Asian Nations, as well as Australia and New Zealand have signed agreements with China on favourable terms. However, the Pakistani negotiators could not get similar tariff concessions for local exports. The country could avail only five percent of the concessional lines as compared to the Chinese goods which enjoy 57 percent tariff concessions.

No doubt China is trusted friend of Pakistan and the biggest trader partner, but every country has its own weak and strong points and wants to protect its interests. The Pakistani markets are infested with Chinese goods as volume of trade between the two countries has increased manifold over the years. The bilateral trade reached $10.029 billion during the last fiscal year of 2015-16, but China has been running a trade surplus with Pakistan which reached $9 billion in 2015. Though under invoicing during the customs clearing process is blamed for the discrepancy in terms of the import bill, the Chinese statistics indicate the deficit reached $14 billion in 2015 from $3.2 billion in nine years ago. It is important to protect the interests of the country and the trade agreements should be signed after taking all the stakeholders into confidence. The council fears the trade agreements with Turkey and Thailand would affect the local industry. On another note, Pakistan has failed to fully use its export potentials as industrial surplus is available in the cottage industry. The local-manufactures of electric items can create great demand in African countries and many other territories of the world. However, this aspect of the country had always been ignored by the business and trade ministries.

Instead of concentrating on the export of food items or raw material, the government should look to facilitate the industrial sector to export value added goods. It should also be taken into account that full dependence on China in every sphere of trade and industry would turn the country simply into a client state.