Commerce and Trade

The world economy was in a deep recession when the present government came to power in 2008.  Due to very high oil and food prices, Pakistan economy also came under pressure.  Pakistan’s export growth also stalled.  There was therefore a need to give a medium to long term policy framework that could help increase exports in a sustainable way.  Ministry of Commerce introduced Strategic Trade Policy Framework (STPF-2009-12) in July 2009 which was designed to address supply side weaknesses in Pakistan’s exports and introduced a large number of initiatives to boost Pakistan’s export competitiveness to the level of 23.5 billion US dollars by the end of 30^th June 2012 and this target was achieved one year in advance as Pakistan’s exports touched the historic high of $ 25 Billion during 2010-11.

Exports performance during the present regime since 2008 is as under:-

Value in US$ Billion

            Pakistan faced a serious trade balance issue in 2008 as our imports were double than the exports.  However, the trade gap was significantly narrowed down with an impressive export performance, especially during 2010-11.

Pakistan’s Trade Diplomacy

            Pakistan faces difficult challenges in foreign markets because competitors enjoy better tariff preferences in large import markets such as USA and EU.  On the other hand, Pakistan’s exports have been severely hit by energy shortages, War on Terror and 2010 Floods.  In this backdrop, the Ministry of Commerce is trying to ensure better market access for Pakistanis products by taking a number of initiatives.

Market Access Agreements

·         Pak-Indonesia PTA

·         PAK-ECO Trade Agreement (ECOTA)

The Ministry of Commerce is also engaged in many other market access initiatives which are at different stages of negotiations.  A brief summary of other market initiatives in Asia Pacific are as under:-

·         Joint Feasibility Study for FTA with ASEAN (10+1) concluded

·         Joint Study of FTA with Thailand concluded

·         Joint Study with Brunei ongoing

·         Pakistan Vietnam Joint Committee on Trade restarted after a long gap of ten years.

·         Pakistan Australia JTC

·         Pakistan New Zealand JTC

Trade Promotion with EU member’s countries

            The European Union is Pakistan single largest trading block partner accounting for 25% of export of Pakistan’s total export and 16% of Pakistan’s total imports.  Pakistan Export to EU have grown from US$ 4.59 million in 2009-10 to US$ 6.18 billion in 2010-11 and Trade balance has shifted in Pakistan’s favour.

            As a result of sustained efforts by Government of Pakistan, EU has agreed to grant concession on 75 tariff lines to Pakistan to revive its floods stricken economy.  The concessions were subject to WTO waiver, which now has been granted due to the tireless efforts of the ministry of Commerce and our Mission in Geneva.  These concessions, with a potential to increase Pakistan’s exports by $ 450 million to EU would be available to Pakistani exporters for two years.

            Government of Pakistan has been making vigorous efforts for Pakistan’s inclusion in EUs GSP plus scheme for preferential market access for Pakistan’s exports.  Earlier Pakistan was not eligible for GSP plus because Pakistan’s exports to EU were higher than the threshold in import vulnerability criteria.  As a result of successful lobbying of the Government of Pakistan, EU has agreed to revise its criteria in the draft GSP scheme for 2014.  This proposal is expected to be placed before the EU parliament for approval in the coming months.

Regional Trade and Connectivity

                        Realizing the importance of regional trade, the government has declared Year 2012 as “Year of Regional Trade and Economic Connectivity”. Different activities undertaken under this initiative are expected to give a big boost to Pakistan’s trade in the region.

Afghanistan‑Pakistan Trade Agreement (APTTA)

                        The historic Afghanistan Pakistan Trade Agreement (APTTA) was signed by the Government of Afghanistan and Pakistan on 20^th October 2010.  This agreement replaced the old Afghan Transit Agreement of 1965.

Trade Relations with India

                        The Cabinet approved the Policy of normalization of Trade relations with India and entrusted Ministry of Commerce with this major task on 2^nd November 2011.  In first stage, Pakistan will switch over from the current Positive List approach to a Negative List by February/March, 2012.  The Negative List will be phased out by December 2012 subject to complete normalization of trade relations and reciprocal facilitation of Pakistan’s exports.  From Pakistan’s perspective, better market access for Pakistani products in India and removal of NTB’s remains top most priority. It is expected that the normalization of Trade with India will open up huge market for Pakistani exports.

Trade Development Authority of Pakistan

            TDAP is the pivotal organization of the country working for the promotion of export of Pakistan and also to provide necessary input in the Trade Policy to the Government of Pakistan.

            TDAP organizes Expo Pakistan Expo Pakistan is the largest show of Pakistan, organized annually with the objective to promote exports.  The products on display include textile, apparel, food, leather and leather products, sports goods, carpet, surgical and engineering goods.  More than 4000 international buyers from 17 countries have established business contacts through this annual exhibition in the last four years.

            Apart from Expo Pakistan, TDAP organized 47 trade delegations to more than 35 countries/regions and participated/managed 58 exhibitions in 28 countries from 2008 to 2011 for export promotion.

National Tariff Commission

            NTC was established by an Act of Parliament called National Tariff Commission Act, 1990 with the functions to advise the Government on tariff protection to the domestic industries for improving its competitiveness and providing assistance to the exporters to promote export from Pakistan.

            The Commission has processed and finalized number of tariff protection cases relating to engineering, electronics, chemical, textile, iron and steel and other industries during the last three years and also sent recommendations for removal of tariff anomalies to the FBR for consideration/implementation in the budget. 

Pakistan Institute of Fashion and Design (PIFD)

            The Parliament through an Act in 2011 reconstituted Pakistan Institute of Fashion and Design, Lahore, in 2011. PIFD aims to educate and train manpower capable of designing and producing functional products with aesthetic value.

            PIFD comprises 4 Schools and offers four years B.S/B. Design degree programes in 6 disciplines through its constituent schools i.e. Pakistan School of Fashion Design, Pakistan School of Fashion Marketing and Merchandizing, Pakistan School of Textile Design and Pakistan School of Accessories and products.  The degrees offered are fashion designing, merchandizing, etc.

            The Ministry of Commerce took an important initiative to establish 6 colleges affiliated with PIFD in 6 cities of the country in 2011.  This project is being rolled out with the collaboration of TDAP.  Six new campuses have already started working in Islamabad, Faisalabad, Peshawar, Multan, Quetta and Halla, providing skilled manpower to the industry and help build clusters of exports.

Pakistan Horticulture Development & Export Company (PHDEP)

                        PHDEP was incorporated as a private limited company under the Companies Ordinance 1984.  Major areas of recent activity of PHDEP are as under:-

·         Market Access & Promotion in partnership with TDAP

·         Linkages established with international importers for kinnow and mango.

·         Pakistani Kinnow introduced in Poland in 2008

·         Mango Export to Jordan

·         Mango promotions carried out in Mauritius, Lebanon and Malaysia in 2011

·         Mango Export to USA, Australia and Japan