Professional Documents
Culture Documents
References:
COVID-19 digital hub: http://www.oecd.org/coronavirus/
Curran, E. (2020), “Urgent Demand for Medical Equipment is Making Air Cargo Fees
“Absolutely Crazy””, Bloomberg, https://www.bloomberg.com/news/articles/2020-03-
30/-absolutely-crazy-air-cargo-fees-highlight-supply-chain-squeeze (accessed on 6
April 2020). [1]
Baschuk, B. (2020), “A Trade Collapse that’s Heading Into the History
Books”, Bloomberg, https://www.bloomberg.com/news/articles/2020-03-26/supply-
chain-latest-a-trade-plunge-worthy-of-the-history-books (accessed on 6 April 2020).
[2]
Evenett, S. (2020), “Tackling COVID-19 Together”, Global Trade Alert, University of
St. Gallen, Switzerland, https://www.globaltradealert.org/reports (accessed on 6 April
2020). [3]
.
AMIS (2020), Market Monitor, No. 77, http://www.amis-outlook.org. [4]
Notes:
← 1. Further information on AMIS is available at www.amis-outlook.org.
← 2. OECD Policy Brief on the value chain for surgical masks (forthcoming).
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Impact COVID-19 on Trade (Imports and Exports) of Pakistan
REFERENCES:
1: “Economic Impacts of COVID-19 Through Trade Disruptions in Pakistan,” PIDE COVID-19
BULLETIN No. 11, Pakistan institute of Development
Economics, https://www.pide.org.pk/pdf/PIDE-COVID-Bulletin-11.pdf.
2: Haque, Nadeem Ul, Awake the Sleeper Within: Releasing the Energy of Stifled Domestic Commerce
https://pide.org.pk/pdf/Working%20Paper/dom_comrce_paper%5b1%5d.pdf
English
Image
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Impact COVID-19 on Trade (Imports and Exports) of Pakistan
Photo credit: World Customs Organization
This blog is part of the 'Act Now Pakistan' series focusing on ideas, policies
and actions for Pakistan to recover stronger and better as the COVID-19 crisis
subsides.
As the ‘Great Lockdown’ emerged from the global COVID-19 pandemic, it is
continuing to devastate communities and jobs, challenge businesses that
struggle to survive, and strain fiscal space of governments working to protect
both lives and livelihoods.
Global trade is heavily impacted as governments took swift measures to
stymie the outbreak, declaring partial or total lockdown measures in countries
around the world that have not yet been completely lifted.
Pakistan is not immune to the economic shock caused by the coronavirus,
and its exports have been hit hard.
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Impact COVID-19 on Trade (Imports and Exports) of Pakistan
Last May, the country recorded $1.39 billion in merchandise exports, the
lowest number in years and a 34 percent drop from a year ago.
Short-term global trade prospects don’t offer room for optimism as maritime
traffic analyses, a good predictor of trade flows, forecast contractions in
exports in the months ahead.
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Impact COVID-19 on Trade (Imports and Exports) of Pakistan
For example, for a potential Pakistani maker of N95 masks, this means the
elimination of tariffs, regulatory duties, and additional customs duties on melt-
blown fiber, that currently stand at 12 percent.
And if ‘Make in Pakistan’ is to be successfully complemented by a ‘Sell to the
World’ initiative, then import duties on final goods will also need to fall
gradually.
With effective rates of protection at 261 percent for food processing, for
example, it is unlikely Pakistani makers will go global anytime soon, since they
will prefer the coziness of the highly protected domestic market.
In this way, import taxes are nothing but export taxes in disguise. Introducing
sunset clauses to tariff protection is key to eliminate the anti-export bias.
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Impact COVID-19 on Trade (Imports and Exports) of Pakistan
Leveraging artificial intelligence and big data will
help exporters harness the potential of online
marketing platforms.
Helping firms comply with international standards
In addition, it’s critical that Pakistan help its firms comply with international
standards and secure the right certifications to prove it.
Pakistan has a comparative advantage in the personal protective equipment
(PPE) market.
Many textile and apparel firms have adapted quickly to the COVID-19 crisis
and shifted their production to face masks and shields for healthcare providers
and frontline workers at home and abroad.
But complying with strict health standards expected by clients is expensive.
When a Pakistani denim exporter decided to turn its materials into protective
face shields, the company first got its fibers tested.
However, not all tests that conform to standards set by the United States and
Europe can be done in Pakistan—unlike in Turkey, one of the world’s leading
producers of medical personal protective equipment, where tests cost about
$6,000.
Since testing standards are non-negotiable in global markets, producers from
across the world have seen their products turned down at the border of
importing countries because they were not properly certified.
These rejections create reputational risks for both exporters and their
countries of origin. In that context, the government of Pakistan needs to
provide information about standards requirements and support the country’s
exporters to comply with them.
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Impact COVID-19 on Trade (Imports and Exports) of Pakistan