The United States has said that a free trade accord is too big for Pakistan as there is no match between the economies of the two countries, says a top official of the commerce ministry.
In a briefing to a National Assembly panel on Thursday, Commerce Secretary Zafar Mahmood said the US instead asked Pakistan to seek unilateral trade concessions as the free trade agreement required both countries to provide relaxations and Islamabad could not offer much to Washington.
“Big countries do not strike FTAs with small countries,” Mahmood told the NA standing committee on commerce, headed by Engineer Khurram Dastgir Khan of PML-N.
He was responding to Kashmala Tariq’s question whether Pakistan had linked opening of Nato supplies with signing of FTA.
The US offered to establish Reconstruction Opportunity Zones in militancy-hit tribal areas close to the border with Afghanistan as a unilateral concession but the Congress has yet to ratify it despite a lapse of over six years.
“No country in the world has done what Pakistan did for the US in the fight against terror, but the government has failed to trade off sacrifices with trade concessions despite raising the slogan of ‘trade not aid’,” said Kashmala Tariq of PML Likeminded Group.
Mahmood’s comments are contrary to the ground realities as Pakistan and China have signed FTA which has been working for many years. The secretary had himself told the Senate standing committee on commerce that following the free trade accord with Beijing, Pakistan’s exports increased at a more rapid pace than the rise in Chinese exports to Pakistan.
However, the trade balance was in favour of China. Had there been no FTA, the gap would have been much wider, Mahmood commented at that time.
Missing container issue drags on
In the NA commerce panel meeting, officials of the Federal Board of Revenue (FBR) spoke about investigations into the case of missing containers carrying Afghan commercial cargo and military supplies for Nato and US forces.
Hafiz Anees, head of FBR’s probe committee, said out of 19,000 Nato containers which were believed to have disappeared, 3,542 had been confirmed as “missing”.
Moreover, out of 157,736 US military containers, 77,884 containers have not reached border posts. Yet these containers could not be described as missing and a three-member committee was probing the matter, Anees said.
He said since 2002 the US had been given special privilege, exempting it from submitting goods declaration and the cargo was cleared through a unique system. However, “the matter has been taken up with the Foreign Office and the US may soon be asked to file goods declaration,” he added.
The standing committee expressed concern over slow pace of inquiry into the container scam. The FBR has estimated a loss of Rs55 billion in duties on commercial cargo while no assessment has been given about Nato and US containers.
A customs department official said Pakistan had also suspended supplies of US military cargo along with Nato cargo.
The standing committee summoned officials of the National Logistics Cell in next meeting to explain its role in the container scam. It also asked the FBR to give in writing which authority could give directives for blocking or unblocking of Nato supplies.
Published in The Express Tribune, January 27th, 2012.
COMMENTS (17)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
@John B: There is even less reason for the US to grant PAK FTA after 2014 than today. If you think all that America's "so-called ally" has done will be forgotten by Congress anytime soon you are mistakened
@Riaz Haq: "There’s a very fundamental shift taking place in the balance of trade for Pakistan with the rest of the world. China has already become Pakistan’s largest trading partner replacing the US. UAE is in second place and the US has slipped to third. Similar trends are visible elsewhere in the world with China’s clout rising and the American and European clout declining."
This is partially true. This is because If you look at the top countries to which Pak is a net EXPORTER then it would be US, UK , Germany. A net export situation helps the foreign reserves while net imports does the opposite. Thus at least at this time it is difficult to reach the conclusion you have reached i.e. importance of US and Europe has decreased. These exports are necessary to pay for imports from China, UAE, KSA etc.
@Riaz Haq: What's the point of China as a trading partner when we only import from them and export only raw commodities. With the US/EU we run a huge trade surplus. With the rest of Asia and even ME its a huge trade deficit. There is no substitute for US and EU since the rest are not buying Pakistani goods, only selling to us.
@Riaz Haq. The operative word is trade. China dumps it's products in Pakistan forcing many of your businesses to go under - at the same time it undercuts your pricing at the international level which is why each year it takes more and more of the business you previously had with the Americans. The reality is that most of the stuff Pakistan produces is exactly what China already produces/exports - that's why you have the enormous trade imbalance with China. I won't give you a lesson in currency valuations - but the fact that the value of Pakistan and India currency goes up/down in proportion with how many American dollars are in your treasuries isn't coincidental.
@Falcon: "Let’s stick to the core issue. " Trust me, the core issue is this fanciful notion that Pakistanis have that they are as good as any. That is why FTA's are being sought. That is why, this chip on the shoulder that Pakistan should be considered a sovereign on par with the US. Your ambassador, with all his influence in that country, could not arrange an audience with the US president for his PM. Surprise, surprise, you are not as good as any. And, you are proving it everyday. No one really knows how good you are, not even you yourselves. Time to take a good, honest and hard look at yourselves. Decide what you really are and where really you want to go and then and only then get down to hard work to build from there. You have already lost 60+ years. To give you an idea, Soviet Union transformed itself from an impoverished, backward nation to a superpower status in exactly the same period, fighting a world war along the way even though it is a country spread over one-sixth of world surface of which Pakistan would not amount to more than one of its districts. Do you realize how much sacrifice that must have taken -and did take?
There's a very fundamental shift taking place in the balance of trade for Pakistan with the rest of the world. China has already become Pakistan's largest trading partner replacing the US. UAE is in second place and the US has slipped to third. Similar trends are visible elsewhere in the world with China's clout rising and the American and European clout declining.
Pakistan's economic future lies with Asia and the Middle East. I think it's best for Pakistan to focus more on building regional trade with currency swap agreements to reduce its dependence on the West and the US dollar for the long term.
@G. Din: There is a difference between an economic argument and an emotional argument. Unfortunately, yours is the latter. The issue at hand is the contextual adequacy of FTA vs. unilateral trade concessions. Let's stick to the core issue.
lets go begging with unilateral concessions around the world now..It seems there is no end to the extend we can go cheap with our hands forever begging for some little grants, little alms. FTA with china has completely ruined our economy and destroyed whatever left of manufacturing in this broken economy. Sooner we realize our insignificant position in global economy the better it is, atleast we will not make fool of ourselves even dreaming of FTA with a 14 trillion dollar economy when we can go bankrupt this year itself as repayment of loans start.
The long and short of "free trade" is that it require and exchange of products. Pakistan doesn't produce anything that can't be acquired from other countries which are more dependable and often priced lower than Pakistan. The fact that those countries act friendly to the USA is another plus.
"The United States has said that a free trade accord is too big for Pakistan as there is no match between the economies of the two countries, " It is high time that someone belled the cat: make it clear to Pakistan not to consider itself equal to every Tom, Dick and Harry. It simply is not equal to anyone. Find your place and then mind that place in the scheme of things, Pakistan. The world is simply getting fed up and losing patience with you! You may be a bull froggie but it could turn fatal for you to seek to dance with the Brahma bulls!
what free trade with US? we can barely get anything for free in pakistan itself!
we have many resources to trade off like textiles, tourism, flesh trade, etc.Punjabis are well known for many businesses legal and sometimes illegal.
but the government has failed to trade off sacrifices with trade concessions despite raising the slogan of ‘trade not aid’,” said Kashmala Tariq of PML Likeminded Group.
That says it all.......absolutely shameful
Buddy Pakistan missed the boat
When Pakistan talks to America it talks to the government of America. When America talks to Pakistan it talks to individuals in the government of Pakistan. The fault is ours not Americas.
FTA regardless of economy of scale is practical with contiguous land mass countries. FTA with India is practical and productive for PAK as compared to India. Unilateral FTA is only in PAK favor and PAK should iron out the political differences with US. At present, it is highly unlikely it will sail through smoothly in US congress especially after Abbottobad and NATO supply route closing but may happen after 2014.
Don't know why this is important? The attitude of PAK is they want nothing to do with the US.