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January 29, 2019

TDAP advocates lobbying free trade agreement with Australia

Business

January 29, 2019

KARACHI: The Trade Development Authority of Pakistan (TDAP) has recommended campaigning for a free trade agreement (FTA) with Australia as existing tariff differential disadvantaged Pakistani exporters against competitors.

“Pakistan should lobby for zero-rated tariffs or at the most concessionary tariffs for top and potential exports to Australia,” a report prepared by the authority noted.

“This will make Pakistani products more competitive in Australian market against-zero rated goods of China, Bangladesh and ASEAN (Association of Southeast Asian Nations) countries.”

Bilateral trade between Pakistan and Australia last year stood at $870 million, whereas the balance remained heavily tilted in favour of Australia as Pakistan imported worth $633 million of goods from Australia.

On the contrary, Pakistan exported just $237 million worth of goods to Australia registering trade deficit of around $397 million.

With regard to bilateral trade between the two countries, Secretary Commerce Younis Dhaga had in an earlier statement said Pakistan’s exports to Australia had not achieved the potential due to tariff differential faced by Pakistani exporters.

He argued that products originating from Bangladesh are subject to zero duty, because of it being a Least Developing Country (LDC) and at the same time China enjoys zero duty because of a Free Trade Agreement (FTA) with Australia.

Dhaga underscored the need for a level-playing field for Pakistani products in Australian market

and suggested that Pakistan

should either be accorded a ‘developing country’ status with zero tariffs on its items of prime export interest or both sides should strive for an FTA.

Pakistan is the fourth largest producer of cotton with easy availability of indigenous raw materials offering diverse range of home textile and garment products. Despite having the capacity and capability, Pakistan could only capture 7.0 percent market share for bed-linen and just 2.3 percent for men’s and boys’ trousers.

Trade associations have been bewailing over higher per unit cost of energy (Rs.12 against the regional average of Rs. 8.0), costlier gas and its shortages, rupee depreciation, and sales tax rebates.

The TDAP report suggested that the perennial concerns of industry need to be addressed.

The export profile of Pakistan to Australia has remained unchanged for the last five years.

The report also recommended that new avenues for product diversification needed to be explored in areas such as paper and paper board, footwear, handicrafts, salt, spices, dry fruits, and juices etc. The same suggestion was also recorded by the trade mission in Australia, the report said.

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