Pakistan Exports News
ISLAMABAD: Pakistan Business Council (PBC) on Tuesday said
the Pakistan exports has potential to enhance to Turkey up to $5 billion,
Business92 reported Tuesday.
Moreover, the PBC report showed that there is potential of $329 million in the
trade of instruments and appliances used in medical, surgical and veterinary sciences.
The PBC in its “2016 Second Review of the Feasibility of a Free Trade
Agreement (FTA) between Pakistan and Turkey,”also urged that Pakistan
should emphasize on pressing for tariff reduction on its high potential export products.
“While the tariffs faced by the top 10 high potential items of Pakistan
are low (9.6 percent or below), there is a significant difference between
tariffs placed on Pakistan and Turkey’s Free Trade Agreement
partners, Egypt and Jordon,” it also said.
Turkey’s FTA partners Egypt and Jordan enjoy tariffs significantly lower
than those currently faced by Pakistan; while the tariffs on Turkish exports,
though high, are at par with those on the exports of Pakistan’s FTA partners
including China, Sri Lanka and Malaysia.
The report also said that Turkey has the potential to export $12.8 billion to Pakistan,
with the greatest potential $346 million in trade of motor cars and other motor vehicles.
According to the report, tariff and trade simulation shows that had both
the countries signed an FTA that eliminated all tariffs in 2015, Turkey’s exports
would rise by 32 percent while Pakistan exports would only rise by 22 percent.
Benefits of a bilateral FTA
The Study finds that the benefits of a bilateral FTA are skewed in favor of
Turkey and its export portfolio fits the import needs of Pakistan better than
vice versa, hence Turkey is more likely to experience increased exports post-FTA.
Looking at the potential for both countries to increase their exports to each
other, Turkey’s export potential is over 2.5 times larger than Pakistan’s export
potential, the report observes.
The report urges that negotiations need to focus on tariff elimination
across high potential exports, particularly those in which the exporter has
a comparative advantage.
Pakistan should also be wary of non-tariff barriers, it says, adding tariff
elimination alone cannot increase Pakistan’s exports to their 2011 level; those
exports can be partly recouped if trade remedy provisions are made part of the FTA.
According to the study, Pakistan’s exports to Turkey are concentrated in cotton
while its imports consist of machinery, electrical, electronic equipment, plastic,
chemicals, synthetic staple fibers, and iron/steel.
Pakistan benefits from a positive, though sharply declining, bilateral trade balance,
the report adds.
The report urges both the countries to do away with discrepancies in their reported
data on which the bilateral trade policy is made, which would help promote trade.