Pak-Thailand trade: Weigh pros and cons before inking FTA

Published: February 8, 2016
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We will import auto parts and other such items in bulk from Thailand, but in return, what is it that we produce for them to import?”. PHOTO: FILE

We will import auto parts and other such items in bulk from Thailand, but in return, what is it that we produce for them to import?”. PHOTO: FILE

KARACHI: Countries sign Free Trade Agreements (FTA) to promote trade interests or create a win-win situation for both parties, but Pakistan’s case is different.

Negotiations are under way for another FTA; this time with Thailand.

Experts believe, keeping earlier negotiations in mind, the FTAs signed with Malaysia and China have not helped the country much. We failed to get significant tariff concession in the agreements and hence failed to increase exports.

Fearing another failure, the business community and economists want the government to take its time on research on trade potential before signing an FTA with Thailand.

“We want the government to share the negotiation terms with the business community as we are the stakeholders who will have to deal with the repercussions,” said the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Abdul Rauf Alam.

“FTAs will only help if they have support from the business community,” he added.

“Pakistan’s FTA with China was tilted in favour of China. As a result, the Chinese exports grew. Ours, however, did not show any significant improvement,” said the president of a leading chamber, on condition of anonymity.

“Now Pakistan and China are renegotiating the FTA. The Chinese, though do not seem interested, as a year has passed by and no significant success has been reported so far,” he added.

Some believe Pakistan simply lacks the capacity to negotiate.

“Our government simply lacks homework. When you do haphazard research, or not research at all, you make such mistakes,” said Invest and Finance Securities CEO Muzammil Aslam.

Supporting FPCCI’s viewpoint, Aslam said the government should share whatever research it had so far conducted concerning the upcoming agreement with the business community.

“Firstly, Thailand has never been our major export market. Secondly, the two countries produce similar products like rice, furniture and textiles. “We will import auto parts and other such items in bulk from Thailand, but in return, what is it that we produce for them to import?” he questioned.

“The National Tariff Commission presently lacks the institutional capacity to fulfil its myriad responsibilities, such as setting safeguard measures, performing trade research and tariff rationalisation, and therefore will be unable to address issues having to do with the Pakistan-Thailand FTA,” said a recent report of the Pakistan Business Council (PBC), a private sector not-for-profit business advocacy association of 47 large companies.

“We do not negotiate well, and thus we lose in the end,” PBC Chief Executive Kamran Y Mirza told The Express Tribune.

Mirza, who recently retired after working as the PBC CEO for seven years, said except the Pakistan-Sri Lanka FTA, all other FTAs had gone against the interests of Pakistan.

“It is not just the government, I will also blame our private sector for not actively pursuing export opportunities in those countries with which we signed FTAs,” he said.

The writer is a staff correspondent

Published in The Express Tribune, February 8th,  2016.

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