The Turkish government has recently taken some steps which would decrease the trade volume between Pakistan and Turkey, while our policymakers have not taken the move seriously. It is high time for the government in Islamabad to raise the issue with its counterpart in Ankara to ease trade for Pakistani businessmen.
Bilateral trade figures between Pakistan and Turkey touched US$1 billion (US$997 million to be precise) at the end of 2010. The balance of trade is tilted heavily in Pakistan’s favour. Efforts were underway to increase volume of this trade to US$2 billion by the year 2012. This was the target set by the prime ministers of Pakistan and Turkey during the latter’s visit to Pakistan in October 2009.
Turkey is one of the major buyers of denim and grey fabric from Pakistan. Currently, Pakistan exports cotton, cotton yarn, garments, leather products, plastic, sports goods, man-made fibers, beverage spirits and vinegar, carpets, oil seeds, etc, to Turkey.
We import from Turkey boilers machinery, rubber products, iron and steel, chemicals, electrical machinery and equipments, paper waste, dairy products, minerals, glass and glassware, etc.
However, in the last two months the Turkish government has taken some steps, which would squeeze trade volume between the two countries. The Turkish government has banned export of newspaper waste to other countries, creating problems for Pakistani importers. Import of waste paper in Pakistan from Turkey is around 20-30 per cent. The step is not only causing problems for Pakistan but also creating difficulties in Turkey, where huge quantity of paper waste is accumulating and people associated with this business are in hot waters.
Turkey has also imposed safeguard duty on import of pet (Polyethylene Terephthalate) resin from Pakistan for a period of three years. Pet resin is one of the leading materials for bottling carbonated soft drinks, mineral waters, juices, edible oils and personal care products and packaging pre-packed foods and meals, etc.
The Turkish government took the step purely to target Pakistani exporters, who have been playing an important role in supplying these products to Turkey. PET resin exports from Pakistan constitute 12 per cent share or USD$71 million.
Turkey is strategically located at the cross-roads of Asia and Europe and thus could be a transit route for Pakistani products destined for Europe. In this context, cargo train service between Pakistan and Turkey is an option and both the countries are working on strengthening the existing railway line. Both countries are also seriously discussing signing of a Preferential Trade Agreement (PTA) to further enhance bilateral trade. However, such steps would only shatter the confidence of businessmen thus the trade between both countries would squeeze. It is the need of the hour that our policymakers take this issue up with the Turkish government.
The writer is Commerce Reporter, Pakistan Today
