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Express Tribune
18-05-2025
- Business
- Express Tribune
Pakistan must not miss trade wave
While others deepened economic integration and opened their markets, Pakistan missed a crucial opportunity to align its economy with the rapidly growing neighbour – China. photo: file Listen to article The recent trade deal between the United States and China, cutting reciprocal tariffs by 115% and easing key restrictions, may have cooled tensions, but it has not dispelled the deep uncertainty gripping global trade. Traditional alliances are shifting, and countries are scrambling to secure new economic lifelines. In a dramatic departure from the past, trade agreements that once took years are now being concluded in a matter of weeks. This acceleration signals not just urgency, but a fundamental recalibration of global commerce in an increasingly unpredictable world. Following a wave of tariffs initiated by President Trump, US negotiators are now working to finalise trade deals with multiple countries. Aside from China, the US has only concluded a trade agreement with the UK as of May 8, 2025. Negotiations are currently underway with India, which has reportedly offered to cut tariffs to below 4% and eliminate duties on 60% of tariff lines. In return, India seeks exemptions from the current and future US tariff hikes and preferential access for key export sectors. After negotiating a ceasefire between Pakistan and India, President Trump has committed to increasing bilateral trade with Pakistan as well. Pakistan must develop a clear strategy to expand its exports to the US, where it currently holds only a 0.17% share of total imports, far behind peers like Bangladesh. Tapping even 1% of this market could multiply Pakistan's exports sixfold, but this requires moving beyond low-value textiles and clothing into higher-value sectors such as engineering goods, pharmaceuticals, and IT services to close the gap with regional rivals. China is also recalibrating its priorities. Following a high-level conference on relations with neighbouring countries, President Xi Jinping embarked on a tour of regional countries including Vietnam, Malaysia, and Cambodia aiming to deepen economic integration. This week, China is hosting the Brazilian president and other senior officials of Latin American countries to enhance their ongoing trade and industrial collaboration, infrastructure projects, and technology partnerships. Pakistan signed a free trade agreement (FTA) with China in 2006, making it one of the early movers. However, unlike peer countries such as Vietnam and Thailand, Pakistan failed to capitalise on China's economic rise due to its persistent protectionist stance. While others deepened economic integration and opened their markets, Pakistan missed a crucial opportunity to align its economy with a rapidly growing neighbour. A stark contrast can be seen in Turkiye's experience with the European Union. After entering a Customs Union with the EU in 1996 and eliminating tariffs on manufactured goods, Turkiye transformed its trade landscape. By 2023, bilateral trade with the EU reached nearly €206 billion, with Turkiye's exports to the EU being €111 billion. The EU now accounts for over 40% of Turkiye's exports consisting of high-value goods such as motor vehicles, machinery, and electrical equipment. Similarly, when Mexico joined the North American Free Trade Agreement (Nafta) in 1994, it underwent a major export transformation. Its exports surged from $51 billion in 1993 to an estimated $594 billion in 2023. Moving beyond raw materials like oil and agricultural products, Mexico shifted towards exporting high-value manufactured goods, including automobiles, electronics, and machinery. This industrial evolution, supported by strong US investment and supply chain integration, has positioned Mexico as the top source of goods imported into the United States, underscoring the depth of economic ties between the two countries. These examples highlight how deep economic integration with major partners can substantially increase industrial growth, investment and exports. Unlike Turkiye or Mexico, Pakistan has largely maintained tariffs on consumer goods and has additionally imposed regulatory and other duties on a wide range of Chinese imports. Today, as China seeks to urgently relocate parts of its manufacturing base to partner countries, Pakistan has a renewed opportunity. It should not be fearful of deeper linkages but actively build and leverage them. A recent World Bank study reinforces this potential, showing that where Pakistan reduced import duties, it boosted export competitiveness by lowering input costs and encouraged a shift of resources away from less competitive sectors. As global trade patterns shift and major powers readjust their economic alliances, Pakistan stands at a pivotal moment. The world is moving fast – agreements are being signed, supply chains are relocating, and new sectors are emerging. If Pakistan is to avoid being left behind once again, it must act decisively. This means shedding outdated protectionist policies, pursuing strategic trade agreements with key partners like China and the US and investing in the competitiveness of high-value export sectors. The window of opportunity is open, but not indefinitely. Bold, forward-thinking policy choices today will determine whether Pakistan becomes a central player in the evolving global trade order or remains on the margins as it has done so far. The writer is a Senior Fellow at the Pakistan Institute of Development Economics (PIDE). Previously, he has served as Pakistan's Ambassador to WTO and FAO's representative to the United Nations at Geneva
Yahoo
02-04-2025
- Business
- Yahoo
Trump just proved Brexit was the best decision Britain ever made
We have not seen much in the way of deregulation. Nor have we signed many blockbuster trade deals. And yet for anyone who is still wondering what the benefits were of Brexit, we now have a decisive answer. It has allowed the UK to escape the worst of Donald Trump's tariff wars — and in the medium term that could pay extraordinary dividends. As he unveiled his global tariffs at the White House, the UK was mercifully low down on the list. It wasn't quite the 'nul points' we often get at Eurovision, but our exporters will only face a 10 per cent levy on everything they sell into the US. It was less than much of the rest of the world. And perhaps most importantly, it was only half the 20 per cent imposed on the EU. Sure, that will still hurt. The United States is our single biggest export market, and the levies will depress demand. Even so, there is no question that we have been let off relatively lightly. And we can thank Brexit for that — for three reasons. First, if we were still part of the bloc, or even the Customs Union as hardcore Remainers would like us to be, we would be facing an immediate 20 per cent tariff rate, twice as high as we now will. Next, the EU will almost certainly start a pointless tit for tat tariff war. It will impose retaliatory tariffs, prompting another round of higher levies from the White House, until tariffs hit 40 or 50 per cent on both sides. Inside the EU, we would have no choice but to go along with that. Instead Sir Keir Starmer and his Chancellor Rachel Reeves should be able to see that there is no point in trying to humiliate Trump or force him to back down. It won't work. Our tariffs will stay at 10 per cent and we may even be able to negotiate them even lower or eliminate them completely, something the EU will find impossible. Finally, it will mean British industry now has a clear competitive advantage over the rest of Europe. For Americans, a Scotch will be cheaper than Cognac, and Burberry cheaper than Hermes, but still with a luxury feel. Even better, there will now be a powerful incentive for EU manufacturers to ramp up production in the UK when they are selling products into the US. They will face lower tariffs while still manufacturing in Europe. A few may even move completely. Of course, the tariffs will still damage the global economy. In effect, they are a huge tax increase, and one that will be paid by American consumers. They will leave the international economy in far worse shape than it was. Even so, the UK has clearly escaped relatively lightly. We might even be better off. And we have our departure from the EU to thank for that. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
02-04-2025
- Business
- Telegraph
Trump just proved Brexit was the best decision Britain ever made
We have not seen much in the way of deregulation. Nor have we signed many blockbuster trade deals. And yet for anyone who is still wondering what the benefits were of Brexit, we now have a decisive answer. It has allowed the UK to escape the worst of Donald Trump's tariff wars — and in the medium term that could pay extraordinary dividends. As he unveiled his global tariffs at the White House, the UK was mercifully low down on the list. It wasn't quite the 'nul points' we often get at Eurovision, but our exporters will only face a 10 per cent levy on everything they sell into the US. It was less than much of the rest of the world. And perhaps most importantly, it was only half the 20 per cent imposed on the EU. Sure, that will still hurt. The United States is our single biggest export market, and the levies will depress demand. Even so, there is no question that we have been let off relatively lightly. And we can thank Brexit for that — for three reasons. First, if we were still part of the bloc, or even the Customs Union as hardcore Remainers would like us to be, we would be facing an immediate 20 per cent tariff rate, twice as high as we now will.
Yahoo
22-03-2025
- Business
- Yahoo
Labour pledge to ‘tear down' barriers after new figures reveal Brexit costing UK business £37bn a year
Ministers have pledged to 'tear down' barriers to trade with the European Union after new figures showed Brexit has cost UK business £37bn a year. The price of the UK's departure was laid bare as the government said the UK's total trade with the EU was 5 per cent lower than before we left the bloc. Trade minister Douglas Alexander hit out at the Brexit deal agreed by the previous Conservative government, saying it was 'clear .. (it) is not working well enough.' Labour is currently negotiating a 'reset' of relations, in a deal Keir Starmer has said will repair the UK's damaged relationship with the EU for the benefit of 'generations to come'. Mr Alexander said ministers would work with other countries 'to improve the UK's trade and investment relationship with the EU, tearing down unnecessary barriers to trade to help drive growth'. He added that in the 12 months to the end of September last year the UK's total trade with the EU was 5 per cent 'below the level seen in 2018', before the UK left the bloc, once inflation and precious metals were excluded. Analysis by the House of Commons library estimates the 5 per cent drop to be worth £37bn. Mr Alexander's comments came in a parliamentary written answer to the SNP MP Stephen Gethins, who commissioned the analysis. He said: 'This is an appalling loss of trade at a time when business and the Exchequer can ill afford it.' He added: 'When the government is cutting budgets that will hit the poorest in the UK with benefits cuts - and the most vulnerable around the world with aid cuts - it is obscene that it continues to pursue an expensive and unnecessary hard Tory Brexit. 'The drop in trade makes us all poorer, including taking away resources from the Treasury. It also makes growth more difficult by hobbling business with red tape that is particularly detrimental to SMEs. 'A hard Brexit makes us poorer and less secure. The government must stop punching down on the most vulnerable to balance the books and join the Customs Union and Single Market at the very least.' Earlier this week, The Independent revealed that Brexit had created a 'mind blowing' two billion extra pieces of paperwork - enough to wrap around the world 15 times. Trade expert David Henig, UK director at the think tank the European Centre For International Political Economy, said the fall in trade revealed by the latest figures was 'undoubtedly down as a result of Brexit' and called for practical steps from the government 'of which the most important by far is removing regulatory differences'. Mike Galsworthy, the chair of European Movement UK, said: "Given that the government is admitting that Brexit has hurt UK-EU trade substantially and further says it's mission is to 'remove unnecessary trade barriers', it would be interesting to know why exclusion from the European Single Market, Customs Union and free movement arrangements, which were never on the referendum ballot, are now deemed to be inviolably necessary trade barriers." Tom Brufatto, director of policy and research at Best for Britain which campaigns for closer EU-UK ties, said: 'No one credible argues that the present barriers to trade have been anything but a catastrophe, particularly for British businesses, but independent research shows that the Government can repair the damage with deeper alignment with the EU, boosting the UK economy by up to 2.2 per cent. 'In the context of eye-watering cuts and increased defence spending, maintaining high food and safety standards is completely uncontroversial and should be expedited at the UK-EU summit in May.' The Department for Business and Trade declined to comment further.
The Independent
22-03-2025
- Business
- The Independent
Labour pledge to ‘tear down' barriers after new figures reveal Brexit costing UK business £37bn a year
Ministers have pledged to 'tear down' barriers to trade with the European Union after new figures showed Brexit has cost UK business £37bn a year. The price of the UK's departure was laid bare as the government said the UK's total trade with the EU was 5 per cent lower than before we left the bloc. Trade minister Douglas Alexander hit out at the Brexit deal agreed by the previous Conservative government, saying it was 'clear .. (it) is not working well enough.' Labour is currently negotiating a 'reset' of relations, in a deal Keir Starmer has said will repair the UK's damaged relationship with the EU for the benefit of 'generations to come'. Mr Alexander said ministers would work with other countries 'to improve the UK's trade and investment relationship with the EU, tearing down unnecessary barriers to trade to help drive growth'. He added that in the 12 months to the end of September last year the UK's total trade with the EU was 5 per cent 'below the level seen in 2018', before the UK left the bloc, once inflation and precious metals were excluded. Analysis by the House of Commons library estimates the 5 per cent drop to be worth £37bn. Mr Alexander's comments came in a parliamentary written answer to the SNP MP Stephen Gethins, who commissioned the analysis. He said: 'This is an appalling loss of trade at a time when business and the Exchequer can ill afford it.' He added: 'When the government is cutting budgets that will hit the poorest in the UK with benefits cuts - and the most vulnerable around the world with aid cuts - it is obscene that it continues to pursue an expensive and unnecessary hard Tory Brexit. 'The drop in trade makes us all poorer, including taking away resources from the Treasury. It also makes growth more difficult by hobbling business with red tape that is particularly detrimental to SMEs. 'A hard Brexit makes us poorer and less secure. The government must stop punching down on the most vulnerable to balance the books and join the Customs Union and Single Market at the very least.' Earlier this week, The Independent revealed that Brexit had created a 'mind blowing' two billion extra pieces of paperwork - enough to wrap around the world 15 times. Trade expert David Henig, UK director at the think tank the European Centre For International Political Economy, said the fall in trade revealed by the latest figures was 'undoubtedly down as a result of Brexit' and called for practical steps from the government 'of which the most important by far is removing regulatory differences'. Mike Galsworthy, the chair of European Movement UK, said: "Given that the government is admitting that Brexit has hurt UK-EU trade substantially and further says it's mission is to 'remove unnecessary trade barriers', it would be interesting to know why exclusion from the European Single Market, Customs Union and free movement arrangements, which were never on the referendum ballot, are now deemed to be inviolably necessary trade barriers." Tom Brufatto, director of policy and research at Best for Britain which campaigns for closer EU-UK ties, said: 'No one credible argues that the present barriers to trade have been anything but a catastrophe, particularly for British businesses, but independent research shows that the Government can repair the damage with deeper alignment with the EU, boosting the UK economy by up to 2.2 per cent. 'In the context of eye-watering cuts and increased defence spending, maintaining high food and safety standards is completely uncontroversial and should be expedited at the UK-EU summit in May.' The Department for Business and Trade declined to comment further.
