- Especially with China
Clearly advisor to prime minister on commerce, Razak Dawood, has little appetite for Free Trade Agreements (FTAs); particularly with China. He’s also not very pleased, seemingly, that the $1 billion market access promised by the Chinese, for our exports of course, is not quite materialising. What is more, there’s going to be a revision of the FTA in January, following which such deals with other countries will also be revisited. And it should be clear as daylight by now that there will be no FTAs going forward.
Perhaps the adviser is overlooking, like so many before him, that our exports fetch bottom dollar in the international market not because of the deals we sign with various sovereigns but rather because of how uncompetitive our export base is. Good of the Chinese to promise ever greater market access but, realistically speaking, how much more of our limited textiles and fruits can they import just because Beijing leans favourably towards Islamabad? The emphasis on import substitution, which is basically what the advisor on commerce is advocating, carries mercantilist undertones that, generally, industrialist like Razak Dawood favour to protect their own production base as opposed to the wider economy.
Also, plans to facilitate import of raw material, etc, are always welcome, but until the chronic problem of value addition is addressed, trade will never add meaningfully to the national exchequer. This is the second time Dawood has raised controversy because of his China-specific comments. One wonders if he’s cleared his position – which is supposed to reflect the commerce ministry’s stance – with the prime minister, who has staked national economic survival on the goodwill of the People’s Republic. So far, regrettably, only generic statements have come out of the commerce ministry. Already almost two quarters into the government it seems hopes that PTI, with its tall promises, would have a blueprint ready for implementation have turned out to be false.
