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The Prospects of Pakistan Benefitting from Trade with Eco Countries

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The Prospects of Pakistan Benefitting from Trade with Eco Countries THE PROSPECTS OF PAKISTAN BENEFITTING FROM TRADE WITH ECO COUNTRIES TRADE RELATED TECHNICAL ASSISTANCE PROGRAMME The International Trade Centre implemented the Trade Policy Capacity Building Component of the European Union funded TRTA II programme. It is aimed at the Ministry of Commerce and Government of Pakistan in developing a coherent trade policy and attendant regulations for export competitiveness. Specifically, it will aim to reinforce the skills of government officers working in trade related ministries and implementing agen- cies on issues related to trade policy, commercial diplomacy and regulatory reform. The main way in which to achieve this through the institutional capacity building of key local training institutes, which is intended to have an immediate effect on the capacity of government officers working on trade policy issues. In addition, Component 1 promotes comprehensive, regular and well informed public-private dialogue among the government, private sector and civil society for trade policy development, monitoring and evaluation. To promote local ownership and legitimacy of the dialogue, a steering committee comprising equal representa- tion of the public and private sectors has been established with the formal approval of the Ministry of Com- merce of Pakistan. Its mandate is to oversee the planning, implementation and monitoring of public-private dialogue on key issues. To better inform the public-private dialogue process, research studies are commis- sion and internationally peer reviewed before dissemination to stakeholders. After extension of the TRTA II programme, Component 1 was assigned the additional responsibility of building the institutional capacity of the Competition Commission of Pakistan (CCP). The targeted interventions of Component 1 to achieve these goals constitute the following: Result for Component 1: Coherent trade policy and regulatory reform for export competiveness 1. The Pakistan Institute for Trade and Development (PITAD) institutional capacity is strengthened. 2. PITAD’s and other research institutes’ expertise on trade policy strengthened. 3. Government officers’ capacity on specific trade policy and international trade negotiations strengthened. 4. Research studies contributing to the development of a national export strategy conducted. 5. Public-private dialogue for a coherent national export strategy is fostered. 6. Institutional Capacity of CCP is strengthened. For further information about the ITC implemented Component 1 and the TRTA-II programme visit: http://trtapakistan.org THE TRTA II PROGRAMME IS FUNDED BY PITAD IS THE FOCAL POINT FOR THE TRTA II PROGRAMME THE PROGRAMME IS IMPLEMENTED BY UNIDO IN ASSOCIATION WITH ITC & WIPO THE EUROPEAN UNION Photos: © Thinkstock.com Address: Trade Related Technical Assistance (TRTA II) Programme, Programme Management Office (PMO), 7th Floor, Serena Business Complex, Khayaban-e-Suharwardy, Sector G-5/1, Islamabad, Pakistan Telephone: +92 51 8354 810 Fax: +92 51 2600 124 E-mail: [email protected] Internet: http://trtapakistan.org For enquiries and further details about Component 1 contact: Mohammad Owais Khan, Programme Officer (Trade Policy), International Trade Centre (ITC), EU funded TRTA II programme, Islamabad, phone: +92-51-8354822, Email: [email protected] THE PROSPECTS OF PAKISTAN BENEFITTING FROM TRADE WITH ECO COUNTRIES CHALLENGES FOR ENHANCING PAKISTAN’S EXPORT POTENTIAL TO ECO MEMBER COUNTRIES IN “TEXTILE MADE- UPS” AND “LIGHT ENGINEERING” SECTORS THE PROSPECTS OF PAKISTAN BENEFITTING FROM TRADE WITH ECO COUNTRIES The views expressed are entirely those of the author and do not represent the views of the ITC, their staff or the countries they represent. ii THE PROSPECTS OF PAKISTAN BENEFITTING FROM TRADE WITH ECO COUNTRIES Table of Contents ABBREVIATIONS ........................................................................................................................................... iv EXECUTIVE SUMMARY ................................................................................................................................. 1 INTRODUCTION .............................................................................................................................................. 5 ECO OVERVIEW ............................................................................................................................................. 6 ECO TRADE AGREEMENT .......................................................................................................................... 37 REVIEW OF PAKISTAN’S ECO TRADE ....................................................................................................... 39 LIGHT ENGINEERING GOODS .................................................................................................................... 46 TEXTILE MADE UPS ..................................................................................................................................... 56 STAKEHOLDER REVIEW ............................................................................................................................. 63 TRANSPORT ................................................................................................................................................. 70 TARIFFS & NON TARIFF BARRIERS ........................................................................................................... 77 NON-TARIFF BARRIERS AND CHALLENGES TO DOING BUSINESS IN ECO COUNTRIES .................. 84 CONCLUDING REMARKS - FINDINGS ........................................................................................................ 97 REFERENCES AND SOURCES ................................................................................................................. 106 ANNEXES .................................................................................................................................................... 114 iii THE PROSPECTS OF PAKISTAN BENEFITTING FROM TRADE WITH ECO COUNTRIES ABBREVIATIONS ACB Afghan Council for Business Registry ACCI Afghan Chamber of Commerce & Industry AD Investigations Anti-dumping investigations ADB Asian Development Bank AML Anti-Money laundering AMPM After-Markets Parts Manufacturers APTMA All Pakistan Textile Mills Association APTTA Afghanistan Pakistan Transit Trade Agreement ASEAN Association of South East Asian Nations ATT Afghan Transit Trade AVE Ad Valorem Equivalent CARs Central Asian Republics CB Tax Commercial Benefits Tax (applied on imports into Iran) CE Marking “Conformité Européenne” compulsory conformity marking on products placed for display/sale in the EU CET Common External Tariff CFT Combating the Financing of Terrorism CIA Central Intelligence Agency of the United States of America CIS Commonwealth of Independent States CU Customs Union CVD Countervailing Duty DEIK Foreign Economic Relations Board, Turkey ECA Europe & Central Asia ECO Economic Cooperation Organization ECO Bank ECO Trade & Development Bank ECOTA ECO Trade Agreement EDB Engineering Development Board, Ministry of Industries & Production Government of Pakistan EFTA European Free Trade Association ERW Electric Resistance Welded (steel pipes) EU European Union EuoroMed European Union – Mediterranean Partnership EurAsEC Eurasian Economic Community (Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan) FATF Financial Action Task Force FBR Federal Board of Revenue, Government of Pakistan FBS Federal Bureau of Statistics, Government of Pakistan FOB Free on Board FPCCI Federation of Pakistan Chambers of Commerce & Industry iv THE PROSPECTS OF PAKISTAN BENEFITTING FROM TRADE WITH ECO COUNTRIES FTAs Free Trade Agreements GATT General Agreement on Trade & Tariffs GDP Gross Domestic Product HS Harmonized System IFRS International Financial Reporting Standards ISGS Inter State Gas Systems, Ministry of Petroleum & Natural Resources ISO International Organization for Standardization IT Information Technology ITC International Trade Center, Geneva KCCI Karachi Chamber of Commerce & Industry Kg Kilogram KK Highway Karakoram Highway (Pakistan to China) LC Letter of Credit LPI Logistics Performance Index (World Bank) MACH. Machinery MFN Most Favoured Nation MT Metric Tons mTons Million Tons MUSIAD Independent Businessmen & Industrialists Association, Turkey n.a. not available n.e.s not elsewhere specified NAFTA North American Free Trade Association NEEDS Assessment National Engineering Exports Development Strategy NLC National Logistics Cell NTBs NonTariff Barriers NTMs Non-Tariff Measures OEM Original Equipment Manufacturers OFAC Office of Foreign Assets Control Pak Pakistan PAPAAM Pakistan Auto Parts and Accessories Manufacturers Association PET Polyethylene Terephthalate PIDE Pakistan Institute of Development Economics PKR Pakistan Rupee PNSC Pakistan National Shipping Corporation PTA Preferential Trade Agreements RCD Regional Cooperation for Development RTA Regional Trade Agreements SAARC South Asia Association for Regional Cooperation SBP State Bank of Pakistan SDR Special Drawing Rights v THE PROSPECTS OF PAKISTAN BENEFITTING FROM TRADE WITH ECO COUNTRIES SME Small or Medium-sized Enterprise SMEDA Small & Medium Enterprises Development Authority, SPO State Planning Organization, Turkey SPS Sanitary & Phyto-Sanitary measures Stats Statistics TDAP Trade Development Authority of Pakistan, Ministry of Commerce, Government of Pakistan TAPI Turkmenistan-Afghanistan-Pakistan-India Gas Pipeline TAYSAD Association of Automotive Parts
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