Trade Chronicle Sep-Oct 2015

TRADE CHRONICLE
Pakistan and Turkey enjoy the best
of relations, politically, historically and
culturally. Turkish people use the
word ‘KARDESH’ (beloved friend)
for us. But trade and economic
relations do not reflect the brotherly
relations and much is to be achieved
in this area both by the governments
and private sector business of the two
countries.
The balance of payment has been in
favour of Pakistan for the last 12
years as Pakistan exports are textile
raw materials i.e. cotton yarn, cotton
cloth, Denim cloth etc. and we mostly
import raw material from Turkey.
IMPEDIMENTS
The major impediments relate to the
governments of both countries who
should facilitate and then leave
business to business community of the
two countries.
1) Turkish Government, in order to
protect their textile industry imposed
‘COUNTERVAILING SAFEGUARD’
import duties on textile products and
textile raw material from all over the
world including Pakistan in early 2011.
2) This issue was strongly taken up
with relevant Turkish authorities and
in the JOINT BUSINESS
COUNCIL meeting held at Karachi
in October 2011, presided by
Chairmen from Pakistan and Turkey
Business Councils with more than 50
members from both sides, the matter
was discussed and some leading
textile importers from Turkey pointed
out that bilateral trade (which was
US$1.2 billion) will sharply fall as
textile raw material from Pakistan is
used for value addition in Turkey.
Representations were made to
Pakistan – Turkey economic and trade relations
By Amjad Rafi,
Chairman Pakistan – Turkey Business Council
relevant authorities jointly but without
result. As expected, the figures went
down to $750 million in the very first
year (2012).
3) Inspite of very cordial relations
between the two sides, no
Preferential Trading Agreement
(PTA) exists between the two
countries despite many meetings/
negotiations since 2011. This is an era
of regional trade and FTA’s and
PTA’s which bring WIN WIN
situation to concerned countries but
unfortunately no such agreement
exists even in ECO Region of which
both countries are members.
4) Yet another impediment is that
there is no road or train transportation
between the two countries which
effects early arrival of goods in
Pakistan or Turkey. Presently the only
means of transportation is shipping
which takes 25-30 days between
Karachi and main Turkish ports.
5) Unfortunately the Islamabad –
Tehran-Istanbul (ITI) freight train
which made test runs in 2010 reaching
in 14 days has not taken off mainly
due to operational problems (lack of
locomotives etc) from Pakistan side.
The bright side is that now Pakistan
Railways has successfully restarted
its freight trains within the country and
new locomotives are being inducted
in the system, the Government of
Pakistan should immediately take
measures to start this important route.
During the meeting of ISTANBUL
FORUM in February 2014 in Ankara,
the chambers of three countries
proposed that the ITI train link be
extended by road from Islamabad to
Afghanistan.
This was well taken at the high level
meeting of the Prime Minister of
Pakistan, Presidents of Afghanistan
and Turkey and was part of the
Declaration issued after the meeting.
It is pertinent to point out that the freight
rates should be competitive and
schedules be strictly adhered, to get
confidence of the business community.
The bilateral trade with Turkey and Iran
together is approximately $1.6 billion
which railways can target.
6) There is no road transportation
between the two countries although
Iran and Turkey have excellent road
network. Pakistan – Turkey Business
Council realizing the fact made
efforts through ECO Chamber of
Commerce to facilitate opening of
road transportation through trucks
and trailers etc. Pakistan is the only
country in ECO Region which has not
ratified the TIR Convention for
facilitation of road trade traffic inspite
of assurances given. In the previous
meeting of ECO Chamber of
Commerce in Karachi, the other
member countries took note of the
situation and requested Pakistani
business community i.e. FPCCI to
take up this matter on top priority with
GOP in order to expedite road
transportation. In this connection, a
trial run by trucks was carried out
which took about 10/11 days from
Karachi to Istanbul.
7) As the European Union has
allowed GSP Plus status to Pakistan
after fulfilling all conditions, the
TURKISH COVERNMENT should
also grant the same Status to
Pakistani goods which are exported
there, as Turkey is member of
European Customs Union for the last
Trade Chronicle - September - October 2015 - Page # 07