Wednesday, 30 March 2011 11:57
In the context of Pakistan’s trade relations, two recent developments stand out. One spells hope, the other raises concerns.
Recall that the lobby of Turkish denim manufacturers had pushed its government to enhance the duty on Pakistani fabric from 6.5 percent to 34.5 percent – an increase of 28 percent – which in the words of Mirza Ikhtiar Baig, advisor to prime minister on textile, “would have virtually seized exports to Turkey”.
Well, after weeks of efforts, the additional duty has now come down to 18 percent. While this may still cause trouble for local denim fabric makers, it will be less than what would have been caused had the increase in duty been 28 percent.
Interestingly, this small success in the Turkish deal came on the back of Pakistan Denim Manufacturers and Exporter Association’s collective action. According to Baig, the association pooled in resources to hire a trade lawyer in Turkey for €18, 000, who presented Pakistan’s case immaculately, and, therefore, was helpful in getting the duty lowered.
This was the hope part – that Pakistani businessmen are making collective decisions, not for individual benefits from the local government, but for the country at large. The cause for concern is that despite the payment of €28, 000 to trade lawyers, EU trade concessions to Pakistan were blocked in the WTO round.
WTO negotiations are, indeed, tricky; they require the understanding of complex trade laws, effective presentation, lobbyism, so and so forth. So if one round has failed, it doesn’t mean that the government has failed. And even if the government fails in getting the concessions in time, it would not only be a failure of this government but of preceding governments as well.
“All across the world, market access experts are given positions for 20 years; in India people have been sitting there for 20 years, because it’s a specialised field, and then working for so long they become friends with each other, and so they can lobby better,” Bashir Mohammed, Chairman Gul Ahmed Textile Mills, told BR Research in an interview published in BR’s recently released Industry Review.
Baig somewhat agrees with this notion. “India hires top-quality WTO retirees from Brussels, whereas we are poor in trade lobbyism. We get up too late and too slow,” he said.
Still, just because Pakistan has missed out in the last many years does not mean that there isn’t a solution for the EU trade relief. That solution lies in making the allies understand Pakistan’s importance and the cost it is paying for playing the role in the war against terror.
“The allies are not willing to give us anything back, except for aid money. Money doesn’t solve our problems. Our problems will be solved by job creation,” said Bashir, “The US has given zero duty to 80 countries, but it somehow thinks that one more to Pakistan will hurt it”.
Bashir urges the government to present Pakistan’s case properly. “The government should say that unless you give us trade access, we will not survive,” he said, adding that there is an imminent need to upgrade trade negotiation skills of Pakistani officials.
The government, therefore, needs to form a special committee to work on the EU trade concessions and let the private sector steer it. Letting the government lead the committee could prove futile because the secretary gets changed every year and that breaks the momentum.
Specifically in US’s case, for example, one way to expand Pakistan’s outreach beyond the US administration is to target key US senators and congressmen. To pursue legislation, the government should explore collaboration with the US Members of Congress from those states which have the largest number of Pakistan's apparel clients.
“Allowing Pakistan to export its textiles more easily should be as much a part of US policy as launching drones and cruise missiles,” Richard N. Haass, Ppresident of the Council on Foreign Relations – a top US think tank – wrote in Newsweek early last year. This shows that the appreciation of the problem already exists in the US – what is needed is effective lobbyism.
As for clinching the more immediate EU deal, perhaps PM Gilani should try playing some cricket diplomacy, when he meets his counterpart today. India, that has played a major role in getting the EU deal blocked in the WTO, should be made to realise that for Pakistan, trade access means more jobs. And more jobs can potentially arrest the growth of terrorism – a curse from which India can not escape if it outbreaks.