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Friday, June 14, 2024

Regional Trade hits a Stumbling Block

Regional trade might have been better but due to COVID-19, more Pakistani exports have been affected to the core and it crippled the economies of all participants from all over the world. Unfortunately, so far in the entire globe, it has crossed the disturbing figure of more than 6.2 million people have succumbed to this contagious virus and is seen as a jinx for all tycoons.

In the wake of the ongoing Russia-Ukraine conflict, and the prevailing political rift in our country, the regional trade in Pakistan appears to be deteriorating at the moment. Also, our economy is in a disastrous state as it is being strangled by a massive Gordian knot that couldn’t untangle. This socio-economic concept of the free trade agreement (FTA) gained traction during the 1860s between Britain and France and persistently after the Darkest Hour (WW2). So far Pakistan has free trade agreements with Sri Lanka, China, Malaysia, and SAARC and it’s expected that Pakistan will have binding treaties with other states as well including Russia.

Thus, instead of benefitting from its FTA with Malaysia and China, Pakistan has hampered its trade prospects by not further liberalizing with other countries. Fortunately, our government has recognized these problems and the value of regional linkages otherwise we would have had to stir up a hornet’s nest. At present, the only way for Pakistan to trade with Central Asia is with China under CPFTA which will be valid for four years from January 1, 2020, to December 31 2024 for raw materials and machinery such as oil, petroleum, but apart from this now Russia would be another privilege for us not limiting to RTA but expanding enterprises, industries, associations and joint ventures.

Read more: Why a trade-off with Russia is essential to protect Ukrainian lives?

Understanding the matter better

Regional trade might have been better but due to COVID-19, more Pakistani exports have been affected to the core and it crippled the economies of all participants from all over the world. Unfortunately, so far in the entire globe, it has crossed the disturbing figure of more than 6.2 million people have succumbed to this contagious virus and is seen as a jinx for all tycoons. At the moment, nothing is going to be a silver lining because the country has faced galloping stagflation and economic slowdown, YOY which resulted in the soaring prices of items.

Furthermore, the gas shortages have also slacked the textile industry’s export but it seems this wouldn’t work long-lasting because former premier Imran Khan was headed to Russia for the regional talks on the installation of a gas pipeline. In Pakistan, things are acting like a vicious cycle as we have gone through these cataclysmic events that led to this financial calamity. Now it is high time for the government to chart a course that brings relief from the prairie fire of inflation, which has brewed bitterness in the people’s lives due to its haphazard economic policies. Similarly, when Vietnam was poverty-stricken during the 1980’s it bumped up its economy by incorporating FTA with both Asian and Western countries right after 1995 now in meantime, Pakistan should have to adopt this same strategy for boosting its economy.

Read more: India ready to bypass dollar in trade with Russia

Still and all, it has become a significant aspect of international trade law

Every country imposes different laws and regulations on international trade and seeks to analyze the growing impact of regional bodies such as the EU and NAFTA on the national law of the signatory states. Therefore, conditions to be met for trade in goods in RTAs are set out in GATT Article XXIV (General Agreement on Tariffs and Trade). It’s crystal clear that Pakistan needs to benchmark its trade policies with those of its competitors and rely less on taxes derived from international trade by reforming their bye-laws.

In addition to this, the national action plan on Business and Human Rights (BHR) has been approved by Pakistan including restrictions on civic space and is among the first in the South Asian country to have this plan which aims to combat the drastic increase of child labor and other gross violations such as failure to uphold the rights of women, ensure health, a positive work environment for women and free rein. These human rights are basic rights that protect us all because it is necessary to ensure and implement for women, children, and minorities as this has become an Achilles Heel in the workplace.

Businesses have a significant impact on the way we live our lives and enjoy these human rights even it’s enshrined in Article 18 which is very clear in the Constitution of Pakistan 1973 which gives us a right of freedom of trade, business, and profession. Some rules were adopted whenever this treaty was signed between two or more states such as removing tariffs, eliminating quotas, and subsidies and this agreement came with internal rules that member countries follow among themselves.

Read more: One year of African Continental Free Trade Area: Opportunities for Pakistan

In this crunch time, Pakistan must revamp its taxation policies, and regulations and look for ways to boost its trade with Russia & integrate its comparative advantages this certainly would be the tip of the iceberg so that our economy could cross an inflection point in these tribulations. This approach not only paves the way for its signatories to cooperate dynamically in the multilateral change of an economic process but also helps to institute econ reforms at the grassroots levels.

 

 

The writer is a Lawyer and a Freelance columnist. He can be reached at muhammadzamanbutt666@gmail.com. The views expressed in the article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.