Bypassing private sector in Turkey PTA to cost economy: EFP

KARACHI: Employers’ Federation of Pakistan (EFP) has lambasted the government for keeping the private sector completely out of the loop, while finalising the Preferential Trade Agreement (PTA) likely to be signed with Turkey this week, a statement said.

The PTA will grant Turkey duty exemptions on almost 220 products whereas Pakistan will be given the same trade concession on around 120 products. “Without consultations with the private sector, the PTA may prove to be counter-productive for Pakistan’s economy,” said Ismail Suttar, President EFP.

Suttar said the government did the same when the Pak-China Trade Agreement was signed. “As a result Pakistan failed to realise the true potential of the agreement, whereas China reaped huge benefits by exporting a higher volume of products to Pakistan, thereby worsening our trade balance.”

The Ministry of Commerce did not reach out to the private sector, nor did the apex bodies (EFP and FPCCI) representing the private sector in Pakistan, he said. “Pakistan is going through an economic crisis because of which a PTA without any consultation with the private sector may end up making the economy worse off than before as a result of rising imports.”

It is imperative for Pakistan to remain internationally competitive in sectors that the country has a competitive advantage in, the EFP President said. “If the agreement, which has no input from the private sector, does not include the right products, then it very well may be harmful to the country’s economy.”

EFP chief said that several Pakistan-based companies could be negatively affected as a result of this PTA as their products might become uncompetitive as compared to Turkish products that would enjoy far better duty exemptions.

“Currently, Pakistan is in need of favourable trade agreements. Due to this, the Ministry of Commerce will have to take into consideration the private sector’s views on the agreement and on what products should be included.

Without any inclusion of the private sector, the government is putting Pakistan’s private industry at grave risk,” he said. In its statement, the EFP requested the government to take the private sector on board before framing any trade agreement as without any input from the private sector, the agreement was bound to create uncertainty for Pakistan’s industries and economic outlook.

“The country can no longer afford to have trade agreements that would be unfavourable for local industries and result in a sharp rise in the country’s import bill,” the statement said.