KARACHI: Thailand, having a population of 68 million which was one-third the size of Pakistan’s, exports 10 times more compared to what it imports from Pakistan – one of many examples that have prompted some quarters to seek the announcement of an ‘export emergency’ in order to correct the country’s deteriorating current account balance.
Pakistan’s overall trade deficit in fiscal year 2017-18 stood at $37.7 billion with imports standing at a record $60.9 billion. The current account deficit swelled to $18 billion.
According to Trade Adviser to Thailand Ministry of Commerce Arif Suleman, the industry expects the two countries to sign a free trade agreement (FTA) next year.
“We are experiencing a wonderful period where Pakistan and Thailand are developing their relations and are working as close partners,” said Suleman on the opening day of a three-day Thai exhibition in Karachi.
However, Pakistan’s excessive imports from Thailand indicate that trade facilitation may further widen the deficit as exports from Thailand will grow rapidly.
According to Karachi Chamber of Commerce and Industry (KCCI) President Muffasar Atta Malik, imports from Thailand amounted to $1,400.36 million in calendar year 2017 against $1,008.45 million in the previous year, showing a significant increase of 38.8%.
On the other hand, Pakistan’s exports to the East Asian nation stood at a mere $148.32 million, although they were 24.4% higher from the preceding year when shipments were valued at $119.21 million.
Malik inaugurated the exhibition along with Royal Thai Consulate General Karachi Acting Consul General Khun Apipan Cheecharoen and Thai Trade Centre Dhaka Director Suebsak Dangboonrueng.
Talking to The Express Tribune, Malik acknowledged that an FTA between the two countries would increase trade deficit for Pakistan. But he added that if the government drafted the FTA intelligently, it would be beneficial for Pakistan as well.
“FTAs are signed to facilitate trade but if we are unable to produce tradable goods, then the fault lies with us, not trade,” he remarked. Malik stated that Pakistan should sign FTAs with countries where it was able to find markets for its products.
Pakistan exports yarn, fibre, chemicals, finished oil and cattle meat to Thailand. It imports auto parts from Thailand for local vehicle assembly.
“Thailand is good at producing auto parts but it can’t flood Pakistan with these products even if we sign the FTA because the production of auto spare parts will be increasing in the Special Economic Zones in Pakistan,” he said.
Malik was of the view that Pakistan’s current account deficit swelled because of import of capital goods for China-Pakistan Economic Corridor (CPEC) projects, which would not remain the same in future.
Meanwhile, Cheecharoen highlighted the importance of Pakistan as a growing economy. “Pakistan with a population of around 200 million offers attractive opportunities to the investors globally,” he said.
“The population’s major segment comprises the youth and middle class which is the major attraction for international investors and makes it a major market in Asia.”
(This news/article originally appeared in The Express Tribune on September 2nd, 2018)