Declining Regional Trade | Editorial

According to the data released by the State Bank of Pakistan, Pakistan’s exports to regional countries have decreased by 5.7 percent in the first nine months. Experts see Covid-19 as the main factor for the dip in exports to the regional countries. The pandemic has gravely wounded the world economy impacting all communities and individuals. Developing countries including Pakistan have suffered the most in terms of trade and economic growth.

However, it is also correct that our export policies regarding regional markets are unfriendly to some degree, even though there have been attempts to change this. If we look at India and China, the two major economic powers in the region; both have signed free trade agreements (FTAs) with Asia-Pacific economies. We must look to head in this direction as well, by removing some restrictions with as many countries in the region as possible.

Opening up more markets for exports while potentially having access to what we need here at home for cheaper prices is something the government should seriously be considering. The European model, with all its failings, has much to offer at least in terms of removing economic borders for countries in close geographical proximity.

Of course, a complete removal of all barriers of trade might not be the answer, but there is much to consider in terms of forming bilateral trade agreements that are favourable for both sides. Thankfully, the government has brought a major shift in its foreign policy by focusing on Pakistan’s geo-economic significance. But we must go further to reap more benefits.

The shift suggests that Islamabad has also understood that regional hurdles are less challenging than those a country encounters with states outside the region. While the government is pitching its shift from geo-strategic to geo-economic to all nations with a particular focus on regional ties, FTAs must also be considered as a long-term goal.

The government deserves appreciation for establishing border markets on the western frontiers. Nevertheless, these are only the starting point for focus on regional trade. South-South trade flows are the fastest-growing segment of world trade—Pakistan will lose out significantly if the government does not formulate policies that can foster regional trade.

Source: https://nation.com.pk/28-Apr-2021/declining-regional-trade

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