The European Union (EU) has urged Pakistan to use its diplomatic and political channels to enhance its trade with the ECO countries, which officials believe is far less than real potential. Pakistan's exports in light engineering and textile products to ECO countries were small, amounting to approximately $49.81 million and $10 million in 2010 respectively.
In the case of total exports of light engineering products to ECO countries Afghanistan accounted for a massive 99.3 percent. Addressing a seminar arranged by PItad, ITC and Unido on regional trade with ECO countries in textile made-ups and light engineering sector, under Trade Related Technical Assistance Program (TRTA II) funded by the EU, the EU Acting Ambassador, Mayaudon Pierre, said that he is surprised why trade has not taken off between Pakistan and other ECO countries despite good political and diplomatic relations.
India and China are front runners, he added. Obstacles by local bureaucracy in many of the ECO countries and private companies against Pakistani exports can hardly succeed without the support of the government. He added that embassies, ministers, parliamentarians and the political leadership must play their role in this regard.
According to a paper presented during the brain storming session, it was observed that although signing of transit trade agreement with Afghanistan has given Pakistan access to a few ECO countries, it is important that the government should take steps to expedite the operationalisation of transit trade agreement with Central Asian Republic (CARs) by finalising procedural protocols with the respective governments.
The EU representative said that the general objective is to encourage the private sector to engage, on regional basis, in two priority sectors: textile made-ups is one, light engineering the other. Commercially engaging the region, in the first place, should be a top priority of all Pakistani stakeholders.
He said that Pakistan is strategically located at the crossroads of Central Asia and Northern Asia, two of the fastest growing economic poles in the world. For centuries, the region where Pakistan is now located has beneficiated from this particular situation. The sole evocation of the famous 'Silk Road' speaks volumes of this epoch when merchants circulated precious goods along this area. Its revival, based on today's circumstances and means of connectivity--commercial representatives no longer travel on camel back--should be the common aim of Pakistani and regional actors, with the support of the international community.
An audit of trade facilitation measures for enhancing Pakistan light engineering and made up articles exports to ECO countries, suggests that Pakistan should sign TIR Carnet Convention as most of the ECO countries are using these regimes which have proved instrumental in promotion of intra-regional trade. Pakistan's Government has also been advised to sign other procedural protocol and conventions for making use of TIR Carnets such as commercial transport services regulations, traffic and vehicles.
The government of Iran should be requested to expedite the ratification of bilateral road transport agreement for enabling Pakistani exporters' access to Turkey and EU markets through roads. The frequency of the proposed Gul container train should be increased to take advantage of this cheap and time saving mode of transport.
The Government of Pakistan has also been requested to make efforts to facilitate in arranging cargo flights to CARs, in addition to establishment of financial links and introduction of subsidised insurance schemes to promote trade in the region.