Pakistan’s trade balance improves 19pc in one year

‘Exports remained protected from external shocks arising from geopolitical tensions, depreciation of major currencies and US-China trade war’

1
1481

ISLAMABAD: Pakistan trade balance has improved by 19pc, as the deficit declined from $37.6 billion to $30.6 billion during the last fiscal year.

“The country’s exports remained stable at around $23 billion,” the one-year performance report shared by the Establishment Division revealed. “Pakistani exports were protected from external shocks arising from regional geopolitical uncertainty in the wake of Pulwama incident, depreciation of major currencies and trade war between two major markets, the United States and China.”

According to the report, the stability in exports was due to various policy interventions, the extension of PM’s Export Enhancement Package for three years, relief to five major export sectors in terms of energy prices, rationalisation of the exchange rate and import tariff concession on 422 raw materials of export-oriented industries.

The country’s imports reduced from $60.8 billion to $53.8 billion (12pc) during the last fiscal year (FY19).

As per the report, prudent steps were taken to manage the outflow of imports. These included imposition of regulatory duty on non-essential imported items, sanitary and phytosanitary restrictions imposed on imported food items, labelling conditions and mandatory halal certification imposed on imported edible products, reforms in import policy for used cars etc.

The government also successfully got market access in different potential markets of the world, including China and the Middle East.

In the second phase of Pakistan China Free Trade Agreement (PCFTA-II) concluded in May, Pakistan had received an immediate market access on 313 items, which covered over $8.7 billion of Pakistan’s global exports and $64 billion worth of Chinese imports.

China allowed duty-free market access to Pakistani textiles and food items, including yarn, sugar and rice, worth $1 billion.

As an appendage to Pakistan-Indonesia Preferential Trade Agreement (PTA), Pakistan also managed to get unilateral market access from Indonesia on 20 products.

According to the report, following Prime Minister Imran Khan’s visit to Qatar in January 2019, the eight-year-old ban on Pakistani basmati rice was lifted and a tender for procurement of 4,000 tonnes of Pakistani basmati rice was issued in July 2019.

Pakistan had also received a 500,000MT rice export order from Iran. In addition, the government revived technical level talks with South Korea to negotiate on a Free Trade Agreement (FTA), which had been stalled since 2017.

The government initiated legal and policy reforms in the Ministry of Commerce in order to increase the country’s exports. A National Tariff Policy was prepared as part of the government’s 100-day agenda to transform import tariffs from being a revenue generation tool to a trade policy instrument.

The report further stated that import tariffs on 1,635 raw materials were removed in budget 2019-20.

Exporters were provided with liquidity relief through simplification of procedures regarding sales tax refunds’ disbursement under the PM’s Export Package. They also remained insulated from the increase in gas and electricity prices despite a hike in the international market.

Pakistan’s first-ever Geographical Indications Law (GIL) has been submitted to the cabinet for further approval from the parliament.

An integrated anti-smuggling strategy has been developed by the Commerce Division on the prime minister’s directions for “collaborating efforts of civilian and security agencies to protect domestic industry, trade and revenues”.

The government had also introduced structural reforms in the Ministry of Commerce.

The organisations, unrelated to the core functions of Commerce Division, including State Life Insurance Company, National Insurance Company and Pakistan Reinsurance Company, were transferred to Sarmaya Pakistan.

The core functions of the Commerce Division were being consolidated through organizational integration of Pakistan Horticulture Development Company and Pakistan Expo Company into Trade Development Authority of Pakistan.

A proposal to place Pakistan Institute of Fashion Design under the Ministry of Federal Education and Professional Training would also be submitted to the cabinet.

1 COMMENT

LEAVE A REPLY

Please enter your comment!
Please enter your name here