The Furniture Sector in Pakistan: Export performance and ... - TRTA i

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to ensure duty free import of components used in the finished product instead of obliging exporters to claim duty drawback that is an inefficient way of providing relief. Need for greater compliance There is clear need to improve compliance with the WTO agreements. To compete in international market Pakistani exporters will have to become more careful about compliance with SPS and TBT. Pakistani furniture products have been reportedly banned by some countries on the ground that those products were not properly rounded at the edges resulting in the risk of injury to their users. Our exporters have to be also careful about termite treatment that uses chlorpysifos. 16 Japan as a matter of fact has banned the import of wooden products containing chlorpysifos. Opportunities and competition Many opportunities have become available after the conclusion of the WTO Agreements and consequential trade liberalization. Needless to say, Pakistan is not alone in the field and competition is really intense. We have to adopt a sound strategy and vigorously follow up trade promotion plans. Two factors have been taken into consideration while identifying opportunity offering markets: (i) size of the market, and (ii) degree of presence of Pakistani products. The size of the market has been given greater weight because we should aim at substantial increase in exports that would be possible only in bigger markets. Following is the list of those markets where there seems to be potential for growth of Pakistani furniture export. • United States of America: USA, the first export destination of Pakistan, (16% in value) is among the biggest furniture importers of the world. However, Pakistan’s share of exports is much below than even one percent of the US market. It stands nowhere as compared to other exporters to the USA. China, Canada, Mexico, Italy and Taiwan, which have more than 76% of the United States market. The tariff is zero. There is definite potential for growth for Pakistan. • United Kingdom: The United Kingdom is a big import market (applied tariff is 0%). The UK is Pakistan’s second major export destination (16% in value). However, its market share with us is much less than even 1%. Here again building on our presence (albeit very small) and utilizing our knowledge of this market, there should be good prospects of increasing our share. • United Arab Emirates: UAE (applied tariff is 5%) is at present the third largest export market for Pakistani furniture (15% in value). Despite this fact Pakistan’s share in its imports is below 1% countries like Italy, Malaysia, China and Indonesia have secured major share in UAE’s market with rapid rate of growth of their exports. Pakistan should more intensively focus on prospects in this market with which it is well familiar and which is in the region, offering the advantage of low transportation cost. • Saudi Arabia: Saudi Arabia (applied tariff is 5%) is the sixth largest export destination for Pakistan (3% in value). But Pakistan’s share in its imports is again nominal (below 1%). China, Italy, USA, Malaysia and France are having more than 75% of Saudi 16 International Wood News, American Forest and paper Association, Volume2, Issue 9-March 2003 74 International Trade Centre
Arabian market. Here again, there is potential for growth and need for concerted efforts to optimize the opportunities offered by this market. • Afghanistan: Pakistan is Afghanistan’s top supplier of wooden bedroom and lounge furniture. 26% of Afghanistan imports of wooden furniture are from Pakistan. Pakistan should not lose a market that is one of the major destinations of its exports and is geographically so proximate. Box 3.4 At a glance - Impact of the WTO Agreements on the Pakistani furniture sector Exports • Better market access for Pakistan in the industrial countries markets. • Tariff rates have been drastically reduced in developed countries’ markets (very low or even zero). • There has been a sustained growth of export earnings from US$3 – 4 million per year in the mid – 1990s to US$10 – 15 million per year today. • Reduction in prices and improvement in the quality of inputs. • Opportunity to intensify penetration in the EU, US, UAE, Saudi Arabia and Afghanistan markets. • Great potential for increasing exports but we have to tackle supply side problems. • Must learn to produce what is liked and required abroad and at competitive prices. • Pakistan needs to do intensive research into the need of foreign markets including trends and designs Imports • Substantial opening of Pakistan’s market albeit on relatively higher duty. • No much of a threat at present (tariff rate at 25% is quite high) but problem is caused by malpractice of under-invoicing and misdeclaration and smuggling. • Trend of increasing import growth– potential threat. International Trade Centre 75
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The Furniture Sector in Pakistan
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Acknowledgements The report was pre
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Abbreviations AFTA AHEC AKTRIN APFE
Page 7 and 8:
Table of contents Acknowledgements
Page 9 and 10:
Box 3.1 Multilateral discipline of
Page 11 and 12:
Executive summary This study sets t
Page 13 and 14:
the extent possible maintain or imp
Page 15 and 16:
1 Background and objectives 1.1 EC
Page 17 and 18:
2 Furniture sector in Pakistan 2.1
Page 19 and 20:
On the buyer’s side, there are gl
Page 21 and 22:
According to the websites of import
Page 23 and 24:
Global demand for furniture in main
Page 25 and 26:
suppliers, both domestic and other
Page 27 and 28:
Table 2.3 Pakistani furniture expor
Page 29 and 30:
Figure 2.4 Distribution structure f
Page 31 and 32:
freight rates have increased and do
Page 33 and 34: Price The prices of local machinery
Page 35 and 36: Indonesia has also announced a ban
Page 37 and 38: industry itself should support effo
Page 39 and 40: various counterparts, the supplier
Page 41 and 42: Box 2.7 UK Timber Trade Federation
Page 43 and 44: Figure 2.5 Simplified example on ch
Page 45 and 46: At least 70% of the wood used in ma
Page 47 and 48: Scope of joint ventures There exist
Page 49 and 50: • With FAO’s Forest Products an
Page 51 and 52: The contact information of many of
Page 53 and 54: Box 2.10 USAID initiative in the fu
Page 55 and 56: Opportunities Major opportunities m
Page 57 and 58: pressure on the price. There appear
Page 59 and 60: Pakistan does not export this furni
Page 61 and 62: 3.1.3 Functional scope The function
Page 63 and 64: Current status of efforts to libera
Page 65 and 66: 3.2.2 Information flow-upwards, i.e
Page 67 and 68: Commission (EC/EU) has established
Page 69 and 70: Figure 3.3 Relevant intensity of WT
Page 71 and 72: Box 3.2 Regional Trade Agreements (
Page 73 and 74: Trade Related Aspects of Intellectu
Page 75 and 76: Agreement on the application of san
Page 77 and 78: country or materially retards the e
Page 79 and 80: Relevance of the furniture sector T
Page 81 and 82: 3.4.2 Other countries’ access to
Page 83: Table 3.2 Top 10 buyers of the Paki
Page 87 and 88: • Material from China is being us
Page 89 and 90: 4.2 Obstacles and shortcomings - im
Page 91 and 92: Raw material recovery Raw material
Page 93 and 94: • Consistent policy for supportin
Page 95 and 96: A short-term but maybe a costly mea
Page 97 and 98: 5 Export services in Pakistan 5.1 E
Page 99 and 100: 5.1.3 Federation of Pakistan Chambe
Page 101 and 102: • Pakistan International Freight
Page 103 and 104: The lessons learnt here could be re
Page 105 and 106: 6 Conclusion and recommendations 6.
Page 107 and 108: 6.2 Critical success factors • A
Page 109 and 110: 6.4 Global value chains 6.4.1 Poten
Page 111 and 112: Benefits All timber tends to be air
Page 113 and 114: • Optimise cutting; • Calculati
Page 115 and 116: 6.6.5 If we had US$100,000: A techn
Page 117 and 118: • To modernise such a laboratory,
Page 119 and 120: Annexes Annex A — Sources of info
Page 121 and 122: • Federmobili information on the
Page 123 and 124: • National Home Furnishings Assoc
Page 125 and 126: International Trade Centre 115
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