Realigning Pakistans trade ties

One of the fundamental hurdles to expanding trade beyond conventional trade partners is lack of governmental initiative and diplomatic cooperation with other countries. Foreign policies of successive governments have oscillated between closer alignments with the United States followed by periods of distrust between Washington and Islamabad. But even in times of estrangement with the super power, Pakistans foreign policy has largely remained reactionary to the stance of the United States and India. By comparison, India, Brazil and other emerging economic giants have largely maintained independent and cordial relations with other nations. Resultantly, these countries have, by now, established trade agreements and bilateral investment treaties with myriad countries; providing impetus for international trade. By comparison, Pakistan has dragged its feet where steps should have been taken to build relations and increase the quantum of trade with other countries. "Pakistan has faced claims worth $1 billion and could lose hundreds of millions of dollars more because of international investment treaties that are contrary to the interests of the country," UK-based corporate lawyer Mahnaz Malik noted last year. She revealed that a majority of the 38 bilateral investment treaties (BITs) signed by the country were promulgated in the 1990s but the country only developed its own draft of the treaty in 2006 and had been using the treaty formulated by the British government until this time. The expert had explained that since that treaty was constituted to protect the interest of imperial England, it contains many clauses that leave Pakistan exposed to risks of litigation from foreign counter parties. Yet successive governments and their diplomats inked agreements with countries, without much regard for the perils these may pose to the country. Back in July this year, President Asif Zardari proposed a currency swap arrangement with Iran, during a trip there. This offer came on the back of similar recommendations to China, Sri Lanka and Turkey. However, there has been no mentionable progress on the swap with China (which was the first country to agree to this arrangement) yet. In fact, well placed sources revealed that the snail pace of the central bank in developing the necessary framework was one of the reasons that brought the presidents wrath on former SBP governor Shahid Kardar. And the central bank is by no means the only official quarter to be apathetic in providing conducive environment for expanding the countrys trade ties with other countries. During a visit to Karachi Stock Exchange in March this year, Russian ambassador Andrey Demidov claimed that "the Russian government has sent several letters to the government of Pakistan to express interest in Pakistan Steel Mills, but has received no positive response in this regard so far". Unexplainably, government officials have been pressing for the contract of refurbishment of PSM to be handed to Chinese firms, instead of Russian companies despite the fact that the installation was a Russian project. On Wednesday, Iraqs ambassador to Pakistan Dr Rushdi Al-Ani expressed his countrys intent to provide oil to Pakistan, unconditionally as well as to import cement, pharmaceuticals and other products. However, given the dismal performance of various government departments, it is entirely plausible that these commitments may also go to waste. It is easy to lose sight of trade opportunities for the country in the plethora of western media reports about the economic crisis in Europe and the Americas. After all, the old adage "when America sneezes, the world catches cold," is (falsely) considered an ordained truth. Now, more than ever before is the time to look beyond the conventional trade partners; especially those that attempt to influence the countrys external and internal policies in return for token trade concessions. But to do that, the bureaucracy, elected representatives as well as industry stakeholders must work towards developing the necessary frameworks that ensure efficient and secure trade and investment opportunities for local businesses.