The Foreign Trade Institute of Pakistan, Ministry of Commerce, is conducting a series of training courses for the officers of commerce and trade group under the government's capacity-building programme during the current financial year.
In his lecture on the RTAs and the Association of south-east Asian Nations (Asean), he defined the regional trade arrangements as under:
-Preferential tariff arrangements (PTAs): Exchange of tariff preference with each other.
-Free trade areas (FTAs): Abolition of all the import duties and quantitative restrictions on mutual trade in all goods and retain the existing tariffs against the rest of the world.
-Customs Unions: Abolition of the import duties on mutual trade in all goods and adoption of a common external tariff on the imports from the rest of the world.
-Common markets: Free movement of all factors of production between member countries.
-Economic unions: Common markets' proceed to unify their fiscal, monetary and social policies.
He said the major trading blocks were European Union (EU), Asean, North America Free Trade Area (Nafta), and Gulf Co-operation Council (GCC).
THE NEGOTIATIONS FOR FORMING THE FOLLOWING RTAS ARE IN PROGRESS:
-- The FTA with Sri Lanka, Iran, Bangladesh and Kenya.
-- The PTA with China, which has given preferential tariff on 777 items, including, garments and textile made ups, leather products, and fruits and vegetables. In return, Pakistan has offered similar concessions on 192 items to China.
-- The Safta (South Asian Free Trade Area);
-- The Tifa (Trade and Investment Framework Agreement), which will lead towards establishing the free trade area between Pakistan and the United States;
-- The Ecota (Economic Co-operation Organisation Trade Agreement), under the ECO forum, all the member states agreed to reduce the maximum tariff slab to 15 percent within eight years, aimed at boosting the trade in the ECO countries.
Engr. Jabbar said that Pakistan's major imports were petroleum and producers goods, which accounted approximately for 80 to 90 percent of the total imports from the Gulf states and Organisation for Economic Co-operation and Development (OECD) countries, adding those imports were highly inelastic and could not be reduced substantially.
On the other hand, bilateral trade arrangements or agreements were on the basis of market access in both or all member countries, he added.
THE EXPECTED BENEFITS MAY BE DESCRIBED AS UNDER:
-- The market access of major Pakistani exporting products, including textile, clothing, leather, rice, sports goods, fish products, etc, may be increased and the cost of imports may be reduced.
-- Better business profiling for value-addition by importing regional services and close neighbouring opportunities can conduct the lower cost of the business, integrating partners, joint ventures and mutual benefits and result in product and market diversification.
-- Pakistan's entry into the Asean regional forum may be attributed as the success of the economic policy of the government and could be regarded as a very important economic event, which will promote Pakistan's trade with the Asean countries.
The government was trying its best to transform that status into a full-fledged member of the Asean, he said.
The Asean was one of the potential trade blocks of the world, which presently contributed six percent of the total world trade and had 26 percent intra-regional trade, he added.
He said the Asean had tremendous potential for the regional trade development, as it comprised Asian countries with the highest current growth rates in the world.
"It is anticipated that after Pakistan's entry into the Asean, the current 15 percent trade share of Pakistan's trade would increase manifold," he said, adding the Asean, a regional group of 10 countries, including very important trade partners like Malaysia and Indonesia, would provide Pakistan a lucrative opportunity to enhance its foreign trade.
After Pakistan's inclusion, the Asean Regional Forum (ARF) will have 10 south-east Asian and 14 other states as its members, including the US, EU, China, Japan, Canada, India, Australia and Korea.