The Trade Development Authority of Pakistan (TDAP) has advised the federal government to focus on European Union (EU) for trade enhancement, instead of wasting time on the United States of America (USA).
This advice has come at a time when ties between Islamabad and Washington are touching low level, and the latter did not fulfil its commitment on Reconstruction Opportunity Zones (ROZs ) in the troubled tribal areas bordering Afghanistan.
Commerce Secretary Zafar Mahmood also boycotted scheduled talks with the US in Washington some months back because the issue of ROZs was not on the agenda. "Due to instability in Pakistan and US relations, we have to make a deep focus on EU market for stabling ourselves," said Advisor/Consultant of TDAP, Hamid Zameer Farooqi, in a letter to the federal government.
According to him, among the EU countries, consumption per capita in Italy was the highest, followed by Belgium and Germany. Consumption of woven outwear was lower in Spain than EU average consumption.
In 2008, the share of the total value of women's woven outerwear sales in the major EU countries exceeded 50 percent, making it a leading sector in EU market. Market shares for woven outerwear in 2008 were trousers and shorts 35 percent, dresses 9 percent, skirts 5 percent, indoor jackets 5 percent and other products 15 percent. "Trade with EU is clearly in Pakistan's favour. There is, however, scope for more mutually beneficial commercial activities," he observed.
Under EU offer, $1 billion worth of home textile exports to EU were excluded from concession from Pakistan, while mostly duty-free import of textile raw material was allowed. As a result, local value-added sector strongly opposed EU offer, saying that it would only encourage export of raw material from the country resulting in high input cost for local industry.
Increasing trade with its main partners and with the EU is part of Pakistan's economic revival agenda. Textile and clothing is an important sector for EU-Pakistan trade relations.
The EU has remained Pakistan's largest trading partner, receiving 27.4 percent of Pakistan's exports and providing 17 percent of its total imports. The overall volume of trade between the EU and Pakistan was worth euro 5.06 billion in 2002, with a trade surplus of euro 765 million in Pakistan's favour.
Pakistan's trade with the EU is mainly composed of textiles, which account for over 60 percent of total Pakistani exports to the EU, followed by leather products, which account for 13 percent of total Pakistani exports.
The European Commission (EC ) and Pakistan also cooperate in World Trade Organisation (WTO) multilateral trade negotiations and key aspects of the Doha Development Agenda (DDA). These include, among others, special and differential treatment provision including a package of results with real value-added for developing countries after the Cancun ministerial conference, implementation of developed countries commitments in the field of trade related technical assistance, as an important underpinning of the DDA negotiations and their implementation and specific sectoral negotiations such as in services and non-agricultural (industrial) products, where WTO should seek ambitions tariff reductions in sectors of key export interest to developing countries.
" By some estimates, Pakistan has an immediate requirement for up to $20 billion in infrastructure development that could provide good opportunities for EU exporters and investors," the Consultant opined.
A major privatisation effort in the telecommunications and financial sectors should offer additional markets for EU products and investors. The trade development and the promotion of business and institutional links represent about 10 percent of the EC's development budget for Pakistan.
It is pertinent to mention here that the EU had approved a trade package of euro 900 million for Pakistan, but India and Bangladesh blocked it at the WTO.
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