Trade facilitation for economic corridors in South Asia: the perspective of Pakistan

This study outlines the role of trade facilitation in Pakistan for economic corridors in South Asia. We study the current state of trade related infrastructure in Pakistan and its connectedness particularly with Afghanistan and India. The implications of recently initiated Afghanistan – Pakistan transit trade agreement are discussed. Current impediments in expanding trade relations with India are revisited. A perception survey reveals the issues faced by importers and exporters particularly those dealing with Afghanistan and India. We also held detailed focus group discussions where government functionaries and commercial counselors also participated. The policy recommendations are grounded in existing literature and survey results. The report has highlighted the required improvements in infrastructure arrangements to facilitate trade for fostering cooperation in South Asia between Pakistan, Afghanistan and India. However, trade facilitation also requires harmonizing customs procedures and harmonizing the regulatory framework of other controlling authorities at the border crossings. Linkages need to be established among the customs organizations of the respective countries to exchange data so that export document of one country could serve as the import document of the other country. The phytosanitary and other quality standard of the countries need to be exchanged and harmonized to the extent possible to eliminate the technical barriers to trade. Finally the relations between India and Pakistan must be broad-based and allow guarantee towards non-reversal of a liberalized bilateral trading environment. Towards achieving this objective governments on both sides must be helped by the business community and civil society. Pakistan must also realize that while additional investment in trade infrastructure is necessary for sustaining economic growth, an equal emphasis is required to address issues that keep the existing infrastructure underutilized. In its overall infrastructure score, Pakistan is almost in line with its regional competitors, however it fares poorly when it comes to organizing and managing the already available assets.