After the required groundwork and thorough consultation with the relevant stakeholders, the government has approved the Strategic Trade Policy Framework (STPF) 2020-24 to address the issue of trade deficit. For this purpose, the Framework has conceived a well-planned ‘Trade Diversification Policy’ to increase the domestic exports through various ways and means for ensuring sustainable economic growth of the country.
The main outline of this new policy document was to find out new markets in the world for domestic exports and move from traditional markets to non-traditional markets to increase domestic exports. The policy also carries geographical trade and product diversification for exploring new markets and introducing new export products to global markets.
The twin deficits of trade and the current account have led the government to re-organize its trade and special export policy with extreme diligence after long deliberations. Accord-ing to the policy, the target of domestic exports has been set at $58 billion for the financial year 2020-24.
“The government has fully implemented the trade diversification policy. It has currently witnessed an increase in Pakistan’s product and geographical expo-rts in the global market.” Advisor to the Prime Min-ister on Commerce and Inv-estment Abdul Razzak Da-wood told APP on promoti-on of local exports in the international potential markets.
“During last 70 years, Pakistan’s exports had dep-ended on traditional mark-ets in ten countries with lo-cal textiles relying on only five markets of the United States, China, European Union, United Kingdom and Bangladesh,” he said.
“Now we are in the process of introducing new markets and new products in addition to traditional markets and traditional export products. In this regard the government has made great strides despite the tough time of Covid-19,” Razzak Dawood said.
Under the government’s ‘Trade Diversification Policy’, ‘Look Africa campaign’ is its important policy component — running for the last three years to assess the untapped trading block. Currently, there is great demand of Pakistani tractors in African markets while mobile phones are exported to this region after the new smart mobile units were established in different cities.
Various agreements were signed to enhance regional trade with Central Asian Countries (CARs) and their connectivity to Gwadar Port. Similarly, Transports Internationaux Routiers (TIR) or International Road Transports agreement was signed with Uzbekistan to promote transit trade that would allow trucks carrying goods from Uzbekistan to Pakistan.
“Pakistan’s exports to Central Asian Republics (CARs) countries increased to USD $ 145 million in 2020-21 from USD $ 104 million in 2019-20. For six months, from July-Decem-ber 2021, these exports increased by 173 percent to USD$ 134 million from USD 49 million during the same period last year,” Razzak Dawood said.
“Our ‘Silk Route Reconnect’ initiative is now bearing results. In terms of market diversification, there was an increase in exports to Bangladesh, Thailand, Sri Lanka, Malaysia, Kazakhstan and South Korea,” he informed.
To increase the trilateral trade Volume with CARs, the Adviser said, Pakistan-Uzbekistan Transit Trade Agreement was signed in 2021 at Tashkent and both the countries discussed opening banks in each other’s country. “We are negotiating Preferential Trade Agreements (PTAs) with Afghanistan, Azerbaijan and Uzbekistan besides negotiating transit trade agreements.”
The Ministry of Commerce has also launched the ‘Look Africa campaign’ in search of new and unconventional markets with focus on Central Asian markets, he said. “The country’s exports of non-traditional products, including information technology, have grown by 60 percent in last four months. We have also reduced tariffs and duties on raw materials like textile, fiber and jute to zero percent.”
Razzak Dawood said the current annual $ 2.5 billion IT exports are very low and we have set a target of $ 4 billion IT exports for current. “Due to our prudent policies, we have achieved export target of USD $15.125 in the first half of FY 2021-22 from July-December against the set target of USD$ 15 billion.”
To increase its exports, the government has also adopted a regular e-commerce policy to compete in the emerging US$ 30 trillion e-commerce market. Since Pakistan has a nominal share in e-commerce market, the new policy is hoped to create new opportunities for domestic exports.
In addition, the $8 trillion business to business and business to companies’ trade volume could also benefit the country by increasing its e-commerce exports.
Special Assistant to the Prime Minister (SAPM) on E-Commerce Senator Aon Abbas Buppi has expressed hope that the current target of US$ 2.5 billion trade would increase to $2.5 billion to $5 billion.
“A new Equity Investment Policy has been approved and the e-commerce sector is being linked with Silicon Valley,” Aon Abbas said. “The first e-commerce policy introduced by the present government in 2019 would is opening up new avenues for local e-commerce traders.”
Aon Abbas Buppi said the government has built the first e-commerce university in the country to provide skilled labor in the sector to prepare manpower for ecommerce trade to boost local exports.
Since coming into power, enhancing country’s export had been a major challenge for the present government as the previous governments had failed to make this sector competitive or compatible with the global market and the country continued facing trade deficit for several decades.
Former President Federation Pakistan Chambers of Commerce and Industry (FPCCI) Mian Anjum Nisar has appreciated the government steps for trade promotion. “Most important was the implementation of the new trade policy framework that would be instrumental in finding new trade markets and increase domestic exports.”