NON-TARIFF BARRIERS TO TRADE IN PAKISTAN

1. NON-TARIFF BARRIERS TO TRADE IN PAKISTAN MANSOOR AHMAD BAJWA

2. In This Presentation • Definition of NTBs • Invisible Trade Barriers • Tariff Barriers in Pakistan • Non-Tariff Barriers in Pakistan • Private Sector’s Views on NTBs • Conclusion • Recommendations

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

4. Invisible Barriers to Trade • Non Transparent and cumbersome Administrative Procedures and Government Policies and Regulations • Market Structure • Institutional Factors

5. Tariff Barriers in Pakistan • Max. duty is generally 25% but with many exceptions (e.g. Agri. Products)

6. 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.

7. Non Tariff Barriers in Pakistancontd. • 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

8. 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 non-existent, rail and air connectivity between the two countries has been erratic.

9. Private Sector’s 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

10. Private Sector’s Viewscontd. • 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 other’s bank is also mentioned as a barrier to trade with India

11. CONCLUSION • Pakistan is the least protected economy in south–east 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.

12. 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

13. 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

14. Recommendationscontd. • 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

15. Thank You