Market access and security: major obstacles to trade

Even after years of concerted efforts to liberalise its international trade, Pakistans position on the global trade arena does not appear to be very strong as said so by the World Economic Forum in the recent report on enabling trade. The international trade has seen major shifts in the recent past. After 2008 slum in global trade, international trade rebounded especially within the emerging economies, marking a shift away from the developed countries. Pakistans trade balance has dwindled like anything over the years, and with a mere 0.18 percent share of the world trade, it definitely does not hold a very contributive place among its immediate peers in the South Asia. It holds 116th place in the Enabling Trade Index (ETI)-an index described as a measure of the extent to which individual economies have developed institutions, policies, and services facilitating the free flow of goods over borders and to destinations by the World Economic Forum. Observing the details, it is not shocking to discover out that Pakistan is found amongst the bottom 20 of the total 132 countries, moving further down four places from where it was in 2010. And guess what? The issues that underlie are the same old adamant ones. By far and rightly said by the analysis, the most distinguished areas of concern for trade are the market access and business environment. The domestic and foreign market access is a key challenge for the economy as policy framework, complexity of tariff rates and percentage of duty free imports subjugates foreign goods and access to foreign markets by the country. Similarly, and even important aspect-the business environment demotes the countrys status for enabling trade massively. This includes not only the security situation in the country but also the regulatory environment governing the imports and exports. The cost of war borne by the country ever since the historic 9/11 incident has escalated 6 folds from $2.7 billion in CY10 to $17.8 billion in CY11. For one, travel bans by Western countries for their visitors to travel to Pakistan has heavily dented investments, exports and hence the economic growth, Sadly, security and military expenditure have become a primary focus where tourism and trade have lost their appeal. Moreover, property rights, openness to foreign participation and multilateral trade rules, bureaucracy, red tapism and corruption have all marred the regulatory environment. In crux, amongst the underlying factors highlighted, the most knotty ones for the exporting are the accessing and identifying markets, buyers, trade finance and cost-effective imported raw material; while importing is made most difficult by long-existing tariff and non-tariff trade barriers and import procedures. The recent move to liberalise trade with India is one step forward that could help the country go beyond the imminent trade as it will help in reducing tariff and non-tariff barriers as well as improve the countrys current standing on the globe. This is of prime importance as Pakistan faces massive economic challenge amid its burgeoning population, energy shortage, growing unemployment, while the two Asian behemoths, China and India, continue to ramp up the economic well-being.