ISLAMABAD: Pakistan’s trade balance deteriorated further following the conclusion of free and preferential trade agreements with China, Malaysia and Indonesia, officials of the Ministry of Commerce said on Thursday.
The deterioration in the trade balance was attributed to the trend of “ineffective, ill-planned negotiations” of the Ministry of Commerce with trading partners in the region.
Data compiled by the ministry shows that Pakistan’s exports did not grow in comparison to imports from these countries. “Pakistan already had a trade deficit with these countries. But the preferential trade treaty aggravated the imbalance,” the official said.
As part of trade diplomacy, Pakistan has implemented preferential trade arrangements with 11 countries so far. Pakistan has signed free trade agreements (FTAs) with China, Sri Lanka and Malaysia.
Pakistan has signed and implemented preferential trade agreements (PTAs) with three countries (Iran, Indonesia and Mauritius) and Mercosur, a sub-regional bloc whose full members are Argentina, Brazil, Paraguay and Uruguay.
Other agreements that were implemented include Economic Cooperation Organisation Trade Agreement, Pakistan-US Trade and Investment Framework Agreement, Preferential Tariff Arrangement within the Group of Eight developing countries (D-8) and South Asian Free Trade Area.
The Ministry of Commerce has already launched FTA negotiations with six other entities, namely Bangladesh, Gulf Cooperation Council (GCC), Singapore, Thailand, Turkey and Iran. Pakistan has effective PTAs with Iran and Turkey. Another PTA with Morocco is under negotiation in addition to a trade preferential system of the Organisation of the Islamic Conference.
Data compiled by the Ministry of Commerce shows that Pakistan’s exports fell to $21.9 billion in 2015-16 from $24.8bn in 2012-13 despite all trade preferential arrangements.
As a result, the trade deficit increased to $18.4bn in 2015-16 from $15.3bn in 2012-13.
Published in Dawn, January 20th, 2017
