Enhancing Export Competitiveness : Part – IV

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Article

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It is argued that import duties are refunded by the FBR and therefore in the ultimate analysis there is no additional burden on the exporters. Yes, big and well-connected firms are able to get their refunds which until recent automation and introduction of FASTER took almost years to realise and for which they had to resort to the banking sector and pay financing charges out of their margins.

Small and medium firms that are indirect exporters are unable to fulfill the codal formalities and are at a disadvantage. Global indirect exports have grown at a faster pace than the total exports, but Pakistan did not benefit due to the peculiar obstacles in their way. Nepal, a much smaller economy than ours, was able to reach $1 billion of indirect exports in 2019, up from $337 million in 2009.

Pakistan, according to a recently published ADB report, is at the bottom of global value chain (GVC) trade participation rates. The importance of GVC trade is obvious to even a layperson. Apple’s iPhone assembled and exported from China has more than 90 percent of its components and parts supplied by firms in a large number of countries including Korea, Taiwan, etc. Again, the punitive tariff rate policy becomes a stumbling block along with costly and time-consuming trade facilitation at the borders and relatively inefficient and high logistics costs. The implementation of the National Single Window in 2022 would likely reduce these transaction costs but the costs of evacuation of goods from North to South remains a challenge.

Publication Source

The News

Publication Date

12-10-2021

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