Trade is one of the main focuses of the bilateral partnership between Pakistan and

Canada, as Canada is Pakistan's 21st largest export partner, with a two-way exchange of

nearly $860.0 million in 2018 (The Pakistan Business Council, 2019, p. 1). Canada is a

highly developed consumer economy with technologically advanced industrial sectors

because of its abundance of natural resources in forests, minerals and fossil fuels makes it

one of leading capital intensive nations in the world and makes Canada the world's 10th

biggest economy with $1.7 trillion in GDP in 2018 (p.1). Canada is good at producing

products that require a massive amount of capital, such as automobile manufacturing, oil

production, and refining, steel production, telecommunications, and transportation sectors

(Government of Canada, 2020). Moreover, Canada also has an absolute advantage in

agricultural and mining products because of the vast land, contributing to the low-cost land

and abundance of natural resources provide Canada with an absolute advantage over gold

and crude oil over other nations (Natural Resource Canada, 2020).

On the other side, Pakistan is a semi-industrialized and agri-based economy, which

means that labour prices are minimal in Pakistan. Pakistan's labour market is the 10th

largest in the world, making goods such as textiles and fashion clothing cheaper and giving

Pakistan an absolute advantage and accounting for more than 58.3 percent of Pakistan's

overall exports to Canada. (The Pakistan Business Council, 2019, p. 1).

Canada has a comparative advantage over many products, with rapeseed, locally

known as canola, being the main commodity that Pakistan imported from Canada in 2019.

Pakistan purchased $295.55 million of Canada's oilseeds (p. 1). According to the Pakistan

Agricultural Research Council, Pakistan has reserved just 0.754 million hectares of land for

oilseed cultivation owing to a lack of development in the oilseed plantation system (Pakistan

Agricultural Research Council, 2020, para. 1).

Pakistan has a comparative advantage over rice production as the production of rice

requires a temperate climate; it is challenging for Canada to grow rice (Saddler, 2019 para.

2). According to the USA Rice Federation, Canada purchases more than 70% of rice from

the U.S. and the remainder from Asia (n.d., as cited in Ali, 2015). Looking at the latest trade
problems between the U.S. and Canada, it would be a smart move for Canada to consider

contingency plans. The Canadian Ambassador to Pakistan, Wendy Gilmour, decided to

explore the prospect of sourcing rice from Pakistan benefiting both countries (The Express

Turbine, 2019, para. 2).

Immigration has been influential in the past and growth of Canada as a nation, with

the variety of opportunities that immigrants have to come to Canada, immigration was

always a crucial part of Canadian culture and the Canadian economy's development with the

rise in imports and exports (Government of Canada, 2020). According to Justin Trudeau,

Canada was one of the first nations to enter diplomatic relations with Pakistan in 1947, and

people from Pakistan have migrated to Canada over a century ago and helped the Canadian

economy and trade to grow and evolve over the time (The News, 2020). Pakistan and

Canada are both related through Islamic tradition. According to the Pakistan Bureau of

Statsistics (2020), 96 percent of Pakistanis are Muslims (p. 1), and Islam is also an

extremely significant religion throughout Canada (Stastics Canada, 2011). Canada's Muslim

community rose by 82% to approximately 3.2% of the national population (Stastics Canada,

2011). According to Citizenship and Immigration Canada (2020), Islam is the second-largest

religion in Canada after Christians. Canada's current immigration process supports the

employer-led method and classification is a merit points system that favours candidates with

an educational qualification such as English, and job experience (Government of Canada,

2020). The government supports employers by raising the amount of temporarily allowed

international employees (Government of Canada, 2020). It is a means of replacing positions

with small and semi expertise where Canadians are least interested in getting them, and

people from developing countries such as Pakistan can work on these roles. One means

that immigrants will quickly become a permanent resident in the Express Entry System,

which focuses on scoring methods as those with the highest-scoring will be automatically

eligible to qualify for permanent status in the latest immigration schemes (Government of

Canada, 2020). Moreover, Canada has a refugee system and a variety of flexible

employment initiatives like those for agricultural field employees, enabling refugees from
developing countries such as Pakistan to enter Canada for better employment and better

living standards of semi-skilled farmers of Pakistan (Government of Canada, 2020).

Pakistan has a substantial geographical presence between economic giants such as China and India

and its Non-tariff barriers (NTBs) are having comparatively fewer statutes and regulations, such as

statutory regulatory orders to enforce non-tariff barriers (Kayani and Shah, 2014, p. 5). Pakistan's

limited non-tariff barriers are the outcome of a lack of legal expertise, and if Pakistan signs free

trade agreement with a developed country such as Canada, Pakistani trade will expect to expand

(p. 5). Pakistan's NTBs protect industries with relatively low growth rates (p. 5) and Canadian

NTBs, protect strategic sectors, such as small enterprises, military contractors and industries such

as steel and aluminum that have high growth rates, produce more jobs and are more likely to

compete globally (Government of Canada, 2020). The steel and aluminum industry in Canada is a

significant part of the Canadian economy and employs thousands of Canadians. The government

has taken substantial steps to fight for the industry as the United States imposed unreasonable

tariffs in the past, including opposing World Trade Organization (WTO) and enforcing equal, dollar-

for-dollar countermeasures against USA imports of steel and aluminum (Government of Canada,

2020).

Trade is a significant driver for the economy of Canada as its growth relies on open-world

and secure, stable markets. The Government of Canada is actively seeking increased market access

for trade in goods through negotiations. For example, the government aims to decrease or

remove tariffs in the negotiations on non-agricultural market access that have been

underway at the World Trade Organization (WTO). Similarly, In line with agreements under

the World Trade Organization (WTO) entry, Pakistan's government introduces a system of

tariffs reductions in which the average tariff rate will fall to approximately 30% for all

Canadian importers (International Trade Administration, 2020). However, The Pakistan

Business Council (PCB) warns about signing a Free Trade Agreement (FTA) with Canada as they
already have a small share of textile exports to Canada, Pakistan stands to lose more, particularly

in the agricultural sector, compared to gains from greater access to Canada's textile markets

(Pakistan Business Council, 2020). PBC recommends a restricted Preferential Trade Agreement

(PTA), which enables Pakistani producers to gain greater access to the Canadian textile market,

especially for textiles, in exchange for tariff concessions on certain agricultural products, including

canola and other fruit and vegetables (Pakistan Business Council, 2020).

https://www.pbc.org.pk/wp-content/uploads/Potential-for-a-Pakistan-Canada-Free-Trade-

Agreement.pdf

https://www.canada.ca/en.html

https://www.nrcan.gc.ca/our-natural-resources/minerals-mining/minerals-metals-

facts/minerals-and-economy/20529

http://www.parc.gov.pk/index.php/en/csi/137-narc/crop-sciences-institue/713-oil-seed-

program

https://www.world-grain.com/articles/13092-pakistan-rice-exports-reach-record

https://nuvomagazine.com/magazine/autumn-2015/all-about-rice

https://tribune.com.pk/story/1884896/2-canada-consider-importing-pakistani-mangoes-

rice/
 https://www.thenews.com.pk/latest/355506-justin-trudeau-underscores-importance-of-

pakistan-canada-relations

http://www.pbs.gov.pk/content/population-religion

https://www12.statcan.gc.ca/nhs-enm/2011/dp-pd/prof/index.cfm?Lang=E

https://www.canada.ca/en/services/immigration-citizenship.html

https://www.theigc.org/wp-content/uploads/2014/09/Kayani-Shah-2014-Working-

Paper.pdf

https://www.trade.gov/knowledge-product/pakistan-trade-barriers