Pakistan, Turkey: Local businesses feel neglected as FTA progresses

Experts say prevailing disharmony in policies will diminish benefits of agreement

LAHORE: As the federal government moves forward to sign a Free Trade Agreement (FTA) with Turkey, the local business community has started feeling the heat, claiming that they have not been considered as stakeholders in finalising the agreement.

Industry experts say that the prevailing disharmony in policies would diminish the benefits of the agreement. They advised that the FTA would deliver better if designed in line with the input given by the local industry and investors.



They also opined that the FTA with Turkey should be based on mutual benefits and should consider existing players who have invested and brought FDI in the country.

"If FTA with Turkey reduces duties on imports of products which are produced locally then importers may benefit but local investment in setting up plants and producing goods could be harmed," they said, adding that local industries could roll back their investment and shut down their plants to import goods through FTA thus leaving thousands of people jobless.

Sindh Board of Investment, in a letter to Sindh chief minister, federal ministries of commerce and industries, Federal Board of Investment and TDAP, also raised concern on the FTA with Turkey.

''FTAs are meant to boost trade between countries and open markets for your goods, but unfortunately, in Pakistan, all FTAs and PTAs have only resulted in increase in trade deficit," the letter stated.

Ameen Jan, a consultant who has previously worked at McKinsey and the UN, while talking with group of journalists on Tuesday suggested that FTA should support import of raw material instead of finished goods that are already manufactured in Pakistan, as raw material would encourage local investors to enhance their productivity while taking the benefits of low-priced raw material.



He added that industrial policy, trade policy and export promotion policy should be the foundation of economic growth; trade agreements should support these policies and not be unrelated to them.

Published in The Express Tribune, April 12^th, 2017.

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