KARACHI: The Government of Pakistan is expected to sign a Preferential Trade Agreement (PTA) with Turkey on the 12th of August 2022. Through the agreement, Pakistan has agreed to give duty exemptions to Turkey on almost 220 products whereas Turkey has given an exemption on around 120 products to Pakistan. However, the Ministry of Commerce has failed to reach out to the private sector for consultations on the Preferential Trade Agreement (PTA).
In a statement, President of the Employer’s Federation of Pakistan (EFP), Ismail Suttar said that without consultations with the Private sector, the Preferential Trade Agreement (PTA) could prove to be counter-productive for Pakistan’s economy. This was seen before when the Pak-China Trade Agreement was signed and Pakistan was never able to realize the true potential of the agreement whereas China was able to export a considerably higher volume of products to Pakistan, thereby worsening our Balance of Payments (BOP) position.
The Ministry of Commerce has not reached out to the private sector, nor the apex bodies (EFP and FPCCI) representing the private sector in Pakistan. Pakistan is going through an economic crisis because of which a Preferential Trade Agreement (PTA) without any consultation from the private sector could end up making the economy worse off as a result of rising imports.
Ismail Suttar said, “It is imperative for Pakistan to remain internationally competitive in sectors that the country has a competitive advantage in. If the agreement, which has no input from the private sector, does not include the right products, then it very well may be harmful to Pakistan’s economy.”
EFP chief said that several Pakistan based companies may be negatively affected as a result of this Preferential Trade Agreement (PTA) as their products may become uncompetitive as compared to Turkish products that will enjoy duty exemptions.
Currently, Pakistan is in need of favourable trade agreements to boost the country’s BOP position. Due to this, it is of high importance for the Ministry of Commerce to take into consideration the private sector’s views on the agreement and on what products should be included. Without any inclusion of the Private sector, the Government is putting Pakistan’s private industry and BOP position at grave risk.
The Employer’s Federation of Pakistan (EFP) requests the Government of Pakistan to take the private sector into consultation for any trade agreement Pakistan is pursuing as without any deliberation from the private sector, the agreement is bound to create uncertainty for Pakistan’s industries and economic outlook. The country can no longer afford to have trade agreements that would be unfavourable for Pakistan’s industries and result in a sharp rise in the country’s import bill.
Copyright Business Recorder, 2022