A relationship underutilised

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Pakistan can find much help Down Under

 

 

Thoroughly convinced with the principle of ‘try, try again’, Pakistan and Australia are bent upon improving their bilateral trade and investment relations.

To materialise these hitherto dormant bilateral trade and investment relations, these countries have signed a memorandum of understanding (MoU) desiring to deepen their bilateral economic relations for mutual benefits.

This MoU was signed at the fifth Joint Trade Committee (JTC) meeting held in Canberra on September 18 2014. The Pakistani delegation was led by Secretary Commerce Muhammad Shahzad Arbab and their hosts were personnel from Department of Foreign Affairs and Trade (DFAT) of Australia.

Protection of bilateral trade and investment, bilateral cooperation, transparency and a committee on trade and investment are salient features of the MoU.

The JTC was formed under a Bilateral Trade Agreement signed in 1990 between Pakistan and Australia and its first meeting was held in 2006 in Australia. The second, third and fourth meetings were held in 2010, 2012 and 2013.

This MoU was signed at the fifth Joint Trade Committee (JTC) meeting held in Canberra on September 18 2014. The Pakistani delegation was led by Secretary Commerce Muhammad Shahzad Arbab and their hosts were personnel from Department of Foreign Affairs and Trade (DFAT) of Australia

It is important to note here that both countries are in their 24th year of bilateral trade relationship after the above said agreement was signed and the total trade between them is AUS$596 million (2013) according to DFAT of Australia. Out of this, Australian exports to Pakistan are AUS$402 million and Pakistan’s exports to Australia are only AUS$194 million (2013).

Both countries also sought to enhance bilateral cooperation in services. According to DFAT, the data for trade in services with Pakistan is ‘not available’. This shows there is almost no trade in services or it is so insignificant that there is no data available.

Coming to bilateral investment, it would be really credulous not to mention here that an Agreement for Promotion and Protection of Investment between Pakistan and Australia was signed in February 1998 and sixteen (16) years down the road, the total investment by Australia in Pakistan was merely US$5 million according to State Bank of Pakistan’s figures (July-August 2014).

This moribund investment trend in Pakistan from around the world in general and from Australia in particular is really worrisome. Pakistan is a country which saw an all-time peak of $5.4 billion in its FDI inflows in 2007-08, which fell to only $824 million in FY-2012. The net inflow of FDI in July-August of the current fiscal year went further down to a paltry $87 million.

The JTC was formed under a Bilateral Trade Agreement signed in 1990 between Pakistan and Australia and its first meeting was held in 2006 in Australia. The second, third and fourth meetings were held in 2010, 2012 and 2013

Australia is important here, because it is a country which is eagerly looking to spread its investment tentacles around the world and Asia is one of its prime targets. Talking to Stephen Sacker in Hard Talk on BBC, Australian Treasurer Joe Hockey said Australia is very close to signing a Free Trade Agreement (FTA) with China. Stephen didn’t seem to agree with him and opined that it was widely rumoured these days that political relationship between China and Australia was not that good, to which the treasurer didn’t seem to agree.

Pakistan, through its trade and diplomatic arms present in Australia, must persuade the Australian Government that it can be a lucrative and fertile market for investment in Asia.

Hockey further said that Asia is not only China and there are other countries as well to which his country was very keen to have bilateral relations with like Indonesia, Viet Nam and India. It is again noteworthy here, although Pakistan is a huge market for investment in Asia, the Australian Treasurer didn’t name Pakistan in his comment.

Talking to this writer, Mohammed Azam, former executive director general ministry of commerce, who had also been Pakistan’s Council General in Sydney for around eight years, opined that the start of the next year would be vital because of Cricket World Cup in Australia and Pakistan must organise a trade and investment seminar there. He further said there had been no successful seminar since 2010. He said that Australians mainly like to invest in resources. Given Pakistan’s huge potential in various forms of energy resources, it would be highly beneficial to attract investment in energy sector.