Commerce Ministry fails to take step forward on trade pacts

Author: Shahzad paracha

ISLAMABAD: The Commerce Ministry has failed to make substantive progress in major trade agreements and pacts, including Pakistan-US Trade and Investment Framework agreement (TIFA), South Asian Free Trade Area (SAFTA) and Economic Cooperation Organization (ECO).

Daily Times learnt that the ministry has not only failed to make positive development on FTAs with China Thailand, Iran, Turkey and Indonesia, but it is also not paying heed to TIFA, SAFTA and ECO agreement anymore. The agreements can enhance the country’s export up to $35 billion in 2018 if seriously considered.

Document indicates that TIFA was signed between Pakistan and US on 25th June 2003 at Washington DC with the objective to enhance the both countries international trade and economic interrelationship. Promoting foreign direct investment, resolve the trade and investment problems and reduce tariffs and eliminate non-tariff problem to facilitate greater access to the market of both countries.

Under TIFA, a council was constituted under the both countries officials which purpose was to deliberate on bilateral investment treaty (BIT), pave the way to enter the FTA with US and identify and work towards the removal of impediments of trade and investment flows.

Documents stated that both countries did not make any progress on BIT, on the other hand, US side has not shown interest in FTA with Pakistan.

There is no progress in reconstruction opportunity zones (ROZ) as well, a unilateral trade preference programme of the US for Afghanistan and Pakistan which was passed by US House of Representatives in 2009.

Documents further added that Pakistan also could not utilise from US GSP scheme and there is a decline trend in Pakistan’s export to US in last 10 years as Pakistan export was recorded 4,183 million in 2006-07 and it has decreased to 3,499 million in 2015-16. Furthermore Pakistan’s imports were documented 2,297 million in 2006-07 and it has plunged down to 1,777 million in 2015-16.

Pakistan did not convince the Economic Cooperation Organization (ECO) member states for ECO Trade Agreement despite a lapse of almost 15 years.

Although a meeting was held in February 9, 2017 between the trade minister of Pakistan and secretary general ECO in Islamabad but the agreement has not been implemented as yet due to differences on interpretation of ECOTA articles, non-submission of ECOTA tariff concession lists by Iran and Tajikistan and non-ratification of annexes to the agreement by Tajikistan.

An official said that ECOTA is not a viable agreement because every country has its own interests.

On the other hand, Additional Secretary (Trade Diplomacy) Asad Hayauddin said ECOTA has not been implemented so far due to Iran and Tajikistan. ECOTA is on the agenda of ECO meeting which is going to be held on March 1 in Islamabad.

Furthermore, there is no progress on SAFTA; an agreement was signed in 2006 among the SAARC countries. An official of the ministry told this scribe that SAFTA has been standstill since its inception due to lack of trust between Pakistan and India.

India is signing FTAs with SAARC countries except Pakistan and it is the main hurdle in SAFTA agreement, official added.

Asad said that there is substantive progress on SAFTA; member countries have given the custom tariffs to each other but SAFTA is not fully implemented due to Indian behaviour.

The official said that the prime minister had given the task to ministry to sign FTA with Turkey and Thailand at the end of 2016 but the ministry failed in this regard.

Pakistan and China are also negotiating for FTA-11 for the last three years but to no avail.

About the FTA with Turkey and Thailand, the additional secretary (trade diplomacy) said, “FTAs will be signed after the detailed discussion. Pakistan is providing incentives to countries and we have demanded same incentives to those countries as well.”

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