NON-TARIFF BARRIERS TO TRADE IN PAKISTAN

MANSOOR AHMAD BAJWA

In This Presentation

Definition of NTBs

Invisible Trade Barriers

Tariff Barriers in Pakistan Non-Tariff Barriers in Pakistan Private Sectors Views on NTBs Conclusion

Recommendations

Definition of NTBs
Non-Tariff Barriers include all measures, other than tariffs, that are used to protect domestic industry and discourage imports

Invisible Barriers to Trade

Non Transparent and cumbersome Administrative Procedures and Government Policies and Regulations

Market Structure
Institutional Factors

Tariff Barriers in Pakistan

Max. duty is generally 25% but with many exceptions (e.g. Agri. Products)

Non Tariff Barriers in Pakistan

Lack of information: Entry of new firms into trading with Pakistan indicates anonymous entry into trading which is facilitated by modern modes such as the internet. Lack of Adequate Banking Relations: Some Indian banks do not recognize L/Cs from all Pakistani banks. Moreover payments through Asian currency union are delayed.

Non Tariff Barriers in Pakistan

contd.

Application of standards:
Barriers are often encountered in the application of measures related to standards necessary to protect human, animal or plant life or health, to protect environment and to ensure quality of goods

Visa Restrictions:
Visas can be obtained only for specific cities prior to entry into Pakistan

Non Tariff Barriers in Pakistan

contd.

Communication Problems: Whenever there are disturbances at the Indo-Pak border, the mobile connections are not operational. Trade Logistics: Goods move by air, sea, and rail between India and Pakistan . While road routes for trade are nonexistent, rail and air connectivity between the two countries has been erratic.

Private Sectors Views

Political uncertainty, instability and mistrust between the two countries India cannot be viewed as reliable and long-run market for both imports and exports Pakistani consignment are subject to more stringent checking and detailed security checks in India (e.g. Pakistani Molasses is allowed in 1 ton packs only because of security reasons) Visa and travel restrictions, one port of entry and exit

Private Sectors Views

contd.

Closure of land routes (Wagha, Khokrapar, and Ganda Singh Wala (near Kasur) is also seriously hampering trade with India There is higher port congestions, higher port and demurrage charges, more paper work, and generally more issues of trade and transport facilitation in Pakistan Lack of banking facilities of each others bank is also mentioned as a barrier to trade with India

CONCLUSION

Pakistan is the least protected economy in southeast Asia. Tarifs used to be high in the past but now in non agricultural products max. tariff is 25%. Tariffs applied ad velorem There is no accredited laboratory in the country. Now such laboratories are being established with the assistance of the world bank and Asian development bank.

Recommendations

There should be no quantitative restriction in the guise of security reasons (e.g. restriction on Molasses) Pakistan is exporting food and agri. products all over the world, India should accept SPS certificate issued by Pakistani authorities

Recommendations
contd.

There cannot be a single bullet solution to deal with the most complicated issues between the two countries. Businessmen should be allowed visas without restrictions on number of cities Pakistan should ask India to compensate for the benefits that it gets from Afghan-transit facility by allowing e.g. transit facility to Pakistan for Bangladesh via Bombay

Recommendations
contd.

Strengthen institutions dealing with trade defense and related issues (e.g. NTC and CBR) Expedite the process of opening up of Bank branches Insist on opening up of land routes for trade Pakistan has to be very cautious as the Indian trade regime is very complicated and non-transparent

Thank You