Pakistan needs strategy to benefit from free trade agreements

ISLAMABAD: Pakistan should devise an effective strategy to improve the trade balance and get maximum benefits from the free trade agreements signed with different trading partners, an expert told WealthPK.
The prevalent trade deficit has affected the economy of Pakistan. The country needs to take result-oriented measures to improve the trade balance.
Muhammad Adnan Khan, a socio-economic and development specialist at China-Pakistan Economic Corridor (CPEC) Authority, told WealthPK that China implemented a policy to share the benefits of its economic performance with other nations that collaborated with Beijing through different platforms, including the Belt and Road Initiative (BRI).
“Pakistan is a major beneficiary of BRI,” he said. He said that CPEC gave a boost to different sectors in the country, including agriculture, vocational training, and poverty alleviation. He added that special industrial zones were set up in the country under CPEC.
“China allowed Pakistan to export more than 1,000 products with zero duties. China is the second largest exporter of Pakistani goods with a share of 8% of its total exports, after the United States with a 17% share. But the worrying factor is that Pakistan’s imports from China have grown more. As a result, the trade deficit with China has ballooned,” said Muhammad Adnan.
However, Pakistan is currently struggling to maintain a financial equilibrium because the volume of imports far exceeds the level of exports, adversely affecting the overall economic health of the country. The primary concern is how to improve the trade balance in the presence of FTAs and how to receive the most value from the trading partners of the country.
He said that Pakistani products could not compete with local Chinese items or with those being sent from other regions to China. He said that Pakistani manufacturers and exporters needed to adopt modern techniques to enhance exports to partner countries and help the country to control the overall trade imbalance.
“Proper official research should be conducted to find out the potential export lines in FTA partner countries. Besides this, the local industry should also be provided with incentives by the government to encourage exporters,” said Muhammad Adnan.
He said that another reason for the trade imbalance between China and Pakistan was the lack of guidance for the business community. He said that Pakistani traders were unable to explore the Chinese market owing to a lack of knowledge. He said that Pakistani exporters needed to target the proper Chinese market for their products. He added that the language barrier was affecting trade with China.
“However, the free trade agreements have started to show positive signs. We have achieved a significant level of trade partnerships, which will definitely improve in the coming days and months,” Muhammad Adnan told WealthPK.