1.1.1 Introduction
Businesses are trying to focus and expand their markets to more regional/neighbouring areas for diversification while perceiving the low cost of doing business including travel and financial costs (arising out of any dispute). However, access to any markets including regional/neighbouring are now increasingly dependent on compliance with trade regularity measures. This has also increased the cost of trade whereas bilateral, regional and multilateral trade agreements have greatly reduced the tariff. With lower tariff, countries are now protecting their own industries and markets by taking various measures including technical and non-technical measures. Some essential non-trade objectives involve measures for the protection of public health or the environment etc.
The businesses from developed countries are quick to adopt and comply the restrictive and distortionary effects, however, businesses from developing countries, including Pakistan, have to face these discriminatory measures. It increases their cost of product many folds and distracts them from expanding their businesses. Pakistani businesses are struggling to comply with regulations and procedures in Pakistan and abroad.
Pakistan’s Strategic Trade Policy Framework (2015-2018) placed a strong emphasis on regional connectivity and leveraging Pakistan’s strategic location as a hub for trade and transit. Pakistan trade has not grown exponentially in Afghanistan as envisaged, due to various markets factors. GoP is focusing on improving the trade volumes with Afghanistan.
1.1.2 Background
On September 27, 2018 PREIA, in collaboration with Sarhad Chamber of Commerce and Industries (SCCI) conduced a focused group discussion (FGD) with representatives of businesses, engaged in trading with Afghanistan. One of the purposes of the discussion was to identify policy, procedural and structural issues that have an impact on Pakistan’s competitiveness in Afghani market. It was pointed out that Pakistan’s market share saw a decline and captured by other countries by capitalizing on the opportunity that opened considering the political and administrative impediments slowing down Pak-Afghan bilateral trade. Below two tables are the good indicator of the overall market share of key countries in Afghanistan’s total imports and exports.
Please find details in attached file.