Longest-ever transporters' strike to hurt economy
The 13-day transporters strike cast grotesque shadows, not only on country's exports but on revenue collection by the government as well. On the eve of Christmas and New Year when the exports peak, particularly of textile made-ups, exporters are fearing huge cancellation of orders from their buyers because the longest ever strike has resulted in delays in the on time delivery of cargoes at the destinations.
Copyright Business Recorder, 2012
All Pakistan Towel Manufacturers Association (TMA) Chairman Mahtabuddin Chawla said "the buyers in international markets do not rely on our commitments about timely shipment of goods due to unforeseen developments." The following table depicts a summarised picture of financial loss during strike period:
He referred to the economics and commercial report recently issued by Pakistan's Commercial Counsellor in New York giving reasons for reduced orders received by Pakistan against its competitors. Besides the security situation prevailing in Pakistan, reliability of exporters and negative image of Pakistan need to be removed and set right immediately to win the confidence of foreign importers of Pakistani mercantile, he said.
Chawla requested the government to compensate those exporters who had to ship their products by air to meet deadlines. In-spite of air shipments, perception of Pakistan will not improve and resultantly "we are unable to get fresh orders because of un-reliable suppliers" and also those who had to face cancellation of their orders because of transporters strike and draw up strategy to prevent such a situation developing in future.
According to the commercial counselor's report, in September 2012, total trade between Pakistan and United States fell by 15.9 percent as compared to corresponding period of the previous year. Pakistan's exports to US decreased by 15.2 percent, while US exports to Pakistan also decreased by 17.6 percent. China, Mexico, India, Vietnam, Indonesia and Bangladesh are considered as major competitors of Pakistan.
US imports crawled up by 1.5 percent over the year and grew in few products like crude petroleum oil, motor vehicles for passengers and telephone sets. China, the top spot holder, increased in sale of telephone sets, auto parts and accessories. Canada at second position, increased in motor vehicles for passengers, helicopter and lumber. Mexico, the third largest exporter, grew in trucks, motor vehicles and passengers and parts, telephone sets. India did very well in export of medicaments, vegetable saps and preparation of non-crude petroleum oil.
Pakistan's performance again remained well below its peers. It's textile exports dipped by 18.6 percent in September 2012, and accounted for 87.3 percent of its exports to US. Pakistan's share has slipped to just 0.16 percent of total US imports, which is stagnant since many years. Only three countries could register growth in textiles but all performed better than Pakistan.
Only few items, which expressed significant increase in Pakistan's exports are: cotton women overall by 62.1 percent, carpets by 50.2 percent, surgical instruments by 5.2 percent, and leather apparels by 27.9 percent. Some of the items which followed a negative trend are terry towels by 11.7 percent, cotton sweaters 14.1 percent, cotton woven bed-sheets by 41.1 percent, cotton men's overcoats by 32 percent, hosiery by 47 percent, and quilts by 28.6 percent.
On the other hand, Consulate General of Pakistan, Montreal, Canada in its monthly report covering eight months of calendar year 2012, said that Pakistan's exports were five percent higher compared with 2011 reaching 187 million dollars. Notable increases were observed in fish and sea food, guar gum and thickeners and pharmaceuticals, while decreases were mainly observed in engineering/electrical goods and cotton yarn.
Combined trade between Canada and Pakistan during the first eight months of 2012 was C$417.1 million, -19 percent lower than same period of the previous year, with imports from Canada decreasing -32 percent to C$229.6 million, and exports from Pakistan increasing five percent to C$187.5 million.
In relation to Pakistani exports to Canada, non-textiles increased by 63 percent while textile exports increased by 0.5 percent during 2012. Cambodia and Bangladesh textile exports to Canada have been benefiting from a zero tariff treatment since they have been accorded the "less than developed" status and therefore their participation in Canadian market has increased remarkably lately in detriment of other traditional textile exporters such as Pakistan, India or China. However, these last two supply other products which are among Canada's top imports, such as electrical and mechanical machinery, organic chemicals and articles of iron and steel.
Travel advisory and duty are major bilateral issues which affect trade: Travel Advisory: Foreign affairs and international trade, Canada advises against non-essential travel to Pakistan.
Duty: With 70 percent of Pakistan's exports to Canada being textile products and Canada eliminating duties on imports from Least Developed Countries (LDCs), Bangladesh and Cambodia, who are both heavily oriented towards textiles in their export profile to Canada as well (96 percent and 98 percent respectively), have taken over the market. This creates a disadvantage for Pakistan who is subject to duties ranging from 16 percent 18 percent and competing for the Canadian market in most of the same categories.