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FTAs and business as usual

FTAs and business as usual

Free trade agreements are signed to boost bilateral trade with partner countries but in Pakistan’s case most of the agreements have adversely affected the local business and industry. According to newspaper reports, Pakistan’s imports have jumped by 300 percent during the last three years thanks to blind signing of FTAs. In a situation where exports have constantly been declining, the increase in imports means increase in trade deficit, which has now crossed an alarming level of $32 billion. At last, the burden of mismanagement is laid on the foreign exchange reserves. The country’s political scenario has recently changed with ouster of former prime minister Nawaz Sharif and ensuing chaos has created a vacuum to be filled by second and third tier politicians. God forbid, the country is being pushed toward anarchism as all the external and internal forces are active to disturb peace not only in Pakistan but also in the region. The undue pressure from unserious US president is adding insult to injury which will not only jeopardize regional peace but also economy. The government, on the other hand, seems caught between devil and deep blue sea.

According to experts, the local industry lacks ability to counter and compete with the products dumped by the countries with which we have free trade agreements. Therefore, there is a need to review and revise FTAs to maintain trade balance in favour of all sides. The FTAs should not be signed at the cost of the local industry. The Federation of Pakistan Chambers of Commerce and Industry has already demanded the government re-visit the sections of the free and preferential trade agreements in coordination with partner countries to improve the situation.The FTAs are the integral part of the world economy and are signed for the cause of mutual benefits and protection of Pakistan’s economic interests. However, there is a need to negotiate terms and conditions of agreements before they are signed. It appears the Pakistani officials lack abilities and capacities to negotiate with the partner countries. The free trade agreements and preferential trade agreements have so far paved the way for influx of foreign goods in local markets. The cheap and substandard foreign products have negative impact on the local industry. Various industrial units have been closed down which has not only damaged the local economy, but also increased unemployment in the country. The wholesale signing of FTAs should not a business as usual.