KARACHI: More than 70 per cent of Pakistan’s goods exports could lose market access unless firms meet the new requirements emerging from markets such as the European Union, particularly on traceability and enhanced reporting of labour standards, warned World Bank economist Anna Twum on Tuesday at Tabadlab’s event ‘Trade, Tariffs, and Beyond — Building Pakistan’s Export Economy’.

Building this level of compliance, however, poses its own challenges. Given the size of the informal sector, the absence of national tax numbers, and the low level of digital literacy among farmers, Pakistan is still far from achieving the level of traceability that will soon be demanded, lamented Aftab Haider, CEO and co-founder of Pakistan Single Window.

These structural gaps are becoming even more pressing as global demand shifts. In a recorded message at the event, advisor to the finance minister Adnan Pasha Siddiqui noted that the US corridor accounts for about $5-6 billion of Pakistan’s exports, largely home textiles. In contrast, Bangladesh and Vietnam export apparel, and global demand has shifted toward synthetic sportswear made from artificial fibres. He argued that Pakistan’s textile sector must evolve beyond bedsheets and move into clothing for athletes and Gen Z, as this is where future demand and higher returns lie.

None of this is new. The reasons for Pakistan’s low exports are well known. The country has not integrated into global value chains, unlike Vietnam, and its export base remains narrow, dominated by textiles, cereals, and cotton, and concentrated in a few key markets, including the US, EU, and China. Even the free trade agreements negotiated so far focus mainly on tariff reductions rather than investment or knowledge transfer, Ms Twum emphasised.

High and complex tariffs, in a system where tariff regimes can shift overnight, further deter investors, she added. At one point, around 43pc of the Federal Board of Revenue’s collections came from trade taxes, said Robina Athar, former chairperson of the National Tariff Commission.

This is why the National Tariff Policy is seen as a step in the right direction. Ms Twum noted that while recent economic stabilisation is encouraging, exports remain central to the country’s growth story. Yet exports as a share of GDP have continued to decline despite Pakistan’s estimated export potential of 26pc of GDP, equal to roughly $60bn.

Published in Dawn, December 3rd, 2025