More than half of Pakistani exporters struggle with domestic and foreign regulatory barriers, according to a report published by the International Trade Centre (ITC) and the World Bank Group.
Trade regulations in areas such as testing, certification and licensing are challenging for 60% of Pakistan’s agricultural exporters. This is largely because most countries have stringent regulations in place to protect human health and the environment.
A survey found that 47% of companies that export manufactured goods also have difficulty with these regulations.
Destination countries, particularly in Asia and Europe, are responsible for most of the reported barriers. In addition, domestic rules - from export inspections and tax refunds to export certification - also create difficulties. About 45% of the measures that cause problems for Pakistani exporters originate in Pakistan.
The report recommended focus on greater transparency, upgraded quality and customs infrastructure, streamlined procedures and better enforcement of quality compliance. It also recommended digital solutions, such as an integrated trade portal to give exporters the guidance and information they need to succeed.
“Pakistan has the potential to increase its exports by up to $12 billion by 2024 from the current figure of $24 billion. But market frictions such as regulatory obstacles and lack of information transparency put up to $7 billion of this untapped export potential at risk - especially for small businesses looking to trade more across borders,” stated ITC Acting Executive Director Dorothy Tembo.
“There is, however, great scope for Pakistan to streamline processes, improve quality management and work with exporters to provide consistent, transparent and timely information.”
Survey findings revealed that the most demanding measures were conformity assessment requirements such as testing and product certification. The report, based on a survey of approximately 1,200 exporters, identified the toughest trade hurdles facing Pakistani businesses. It suggested ways for the government and private sector to crank up competitiveness by addressing issues such as export inspections, tax refunds and export certification.
“For Pakistani exporters that are trying to introduce new products, access to export intelligence and information on what it takes to reach a new market is very valuable, particularly for new, small exporters that lack the scale to invest in information searching,” said Gonzalo Varela, Senior Economist at the World Bank in Pakistan.
“Digital trade portals, easily accessible to everyone regardless of location or gender, can be a step in making non-tariff measures more transparent, and compliance less costly.” The report contributed to the development of the Strategic Trade Policy Framework (STPF), spearheaded by the Ministry of Commerce with the assistance of the World Bank under the Pakistan Trade and Investment Policy Programme (PTIPP).
PTIPP is a collaborative effort between the Ministry of Commerce, the Australian Department of Foreign Affairs and Trade and the World Bank Group aimed at supporting Pakistan’s efforts to increase regional trade and investment, with particular focus on strengthening links to other South Asian markets.
Published in The Express Tribune, August 11th, 2020.