The Furniture Sector in Pakistan: Export performance and ... - TRTA i
The Furniture Sector in Pakistan: Export performance and ... - TRTA i
The Furniture Sector in Pakistan: Export performance and ... - TRTA i
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to ensure duty free import of components used <strong>in</strong> the f<strong>in</strong>ished product <strong>in</strong>stead of oblig<strong>in</strong>g<br />
exporters to claim duty drawback that is an <strong>in</strong>efficient way of provid<strong>in</strong>g relief.<br />
Need for greater compliance<br />
<strong>The</strong>re is clear need to improve compliance with the WTO agreements. To compete <strong>in</strong><br />
<strong>in</strong>ternational market <strong>Pakistan</strong>i exporters will have to become more careful about compliance<br />
with SPS <strong>and</strong> TBT. <strong>Pakistan</strong>i furniture products have been reportedly banned by some<br />
countries on the ground that those products were not properly rounded at the edges result<strong>in</strong>g <strong>in</strong><br />
the risk of <strong>in</strong>jury to their users. Our exporters have to be also careful about termite treatment<br />
that uses chlorpysifos. 16 Japan as a matter of fact has banned the import of wooden products<br />
conta<strong>in</strong><strong>in</strong>g chlorpysifos.<br />
Opportunities <strong>and</strong> competition<br />
Many opportunities have become available after the conclusion of the WTO Agreements<br />
<strong>and</strong> consequential trade liberalization. Needless to say, <strong>Pakistan</strong> is not alone <strong>in</strong> the field <strong>and</strong><br />
competition is really <strong>in</strong>tense. We have to adopt a sound strategy <strong>and</strong> vigorously follow up<br />
trade promotion plans. Two factors have been taken <strong>in</strong>to consideration while identify<strong>in</strong>g<br />
opportunity offer<strong>in</strong>g markets: (i) size of the market, <strong>and</strong> (ii) degree of presence of <strong>Pakistan</strong>i<br />
products. <strong>The</strong> size of the market has been given greater weight because we should aim at<br />
substantial <strong>in</strong>crease <strong>in</strong> exports that would be possible only <strong>in</strong> bigger markets.<br />
Follow<strong>in</strong>g is the list of those markets where there seems to be potential for growth of <strong>Pakistan</strong>i<br />
furniture export.<br />
• United States of America: USA, the first export dest<strong>in</strong>ation of <strong>Pakistan</strong>, (16% <strong>in</strong> value)<br />
is among the biggest furniture importers of the world. However, <strong>Pakistan</strong>’s share of<br />
exports is much below than even one percent of the US market. It st<strong>and</strong>s nowhere as<br />
compared to other exporters to the USA. Ch<strong>in</strong>a, Canada, Mexico, Italy <strong>and</strong> Taiwan,<br />
which have more than 76% of the United States market. <strong>The</strong> tariff is zero. <strong>The</strong>re is<br />
def<strong>in</strong>ite potential for growth for <strong>Pakistan</strong>.<br />
• United K<strong>in</strong>gdom: <strong>The</strong> United K<strong>in</strong>gdom is a big import market (applied tariff is 0%).<br />
<strong>The</strong> UK is <strong>Pakistan</strong>’s second major export dest<strong>in</strong>ation (16% <strong>in</strong> value). However, its<br />
market share with us is much less than even 1%. Here aga<strong>in</strong> build<strong>in</strong>g on our presence<br />
(albeit very small) <strong>and</strong> utiliz<strong>in</strong>g our knowledge of this market, there should be good<br />
prospects of <strong>in</strong>creas<strong>in</strong>g our share.<br />
• United Arab Emirates: UAE (applied tariff is 5%) is at present the third largest export<br />
market for <strong>Pakistan</strong>i furniture (15% <strong>in</strong> value). Despite this fact <strong>Pakistan</strong>’s share <strong>in</strong> its<br />
imports is below 1% countries like Italy, Malaysia, Ch<strong>in</strong>a <strong>and</strong> Indonesia have secured<br />
major share <strong>in</strong> UAE’s market with rapid rate of growth of their exports. <strong>Pakistan</strong> should<br />
more <strong>in</strong>tensively focus on prospects <strong>in</strong> this market with which it is well familiar <strong>and</strong><br />
which is <strong>in</strong> the region, offer<strong>in</strong>g the advantage of low transportation cost.<br />
• Saudi Arabia: Saudi Arabia (applied tariff is 5%) is the sixth largest export dest<strong>in</strong>ation<br />
for <strong>Pakistan</strong> (3% <strong>in</strong> value). But <strong>Pakistan</strong>’s share <strong>in</strong> its imports is aga<strong>in</strong> nom<strong>in</strong>al (below<br />
1%). Ch<strong>in</strong>a, Italy, USA, Malaysia <strong>and</strong> France are hav<strong>in</strong>g more than 75% of Saudi<br />
16<br />
International Wood News, American Forest <strong>and</strong> paper Association, Volume2, Issue 9-March 2003<br />
74 International Trade Centre