akistan export diversification and trade p pakistan export diversification and trade policy final...

Download AKISTAN EXPORT DIVERSIFICATION AND TRADE P PAKISTAN EXPORT DIVERSIFICATION AND TRADE POLICY FINAL REPORT

Post on 13-Feb-2020

3 views

Category:

Documents

0 download

Embed Size (px)

TRANSCRIPT

  • PAKISTAN

    EXPORT DIVERSIFICATION AND TRADE POLICY

    FINAL REPORT

    FINAL REPORT

    June 26, 2012

    97939 P

    ub lic

    D is

    cl os

    ur e

    A ut

    ho riz

    ed P

    ub lic

    D is

    cl os

    ur e

    A ut

    ho riz

    ed P

    ub lic

    D is

    cl os

    ur e

    A ut

    ho riz

    ed P

    ub lic

    D is

    cl os

    ur e

    A ut

    ho riz

    ed

  • ABBREVIATIONS AND ACRONYMS

    AEO Authorized Economic Operator

    ATP Annual Trade Policy

    ATTA Afghan Transit Trade Agreement

    BRIC Brazil, Russia, India and China

    CAR Central Asian Republics

    DDRs Duty drawback rates

    DG Director General

    DTRE Duty & Tax Remission on Export

    EDB Export Development Board

    EDB Engineering Development Board

    EFC Export Finance Scheme

    EM Extensive margin

    EP Exportable products

    EPB Export Promotion Board

    EPZs Export Processing Zones

    EU European Union

    EXPY Export Sophistication

    FBR Federal Bureau of Revenue

    FDI Foreign Direct Investment

    FTA Free Trade Agreement

    FTIP Foreign Trade Institute of Pakistan

    GCC Gulf Cooperation Council

    GD Goods Declaration

    GD Director- General

    GDP Gross Domestic Product

    GOP Government of Pakistan

    GSP General System of Preferences

    HS Harmonized System

    ICP Indian Civil Service

    IM Intensive margin

    IMF International Monetary Fund

    IPP Independent Power Producers

    IT Information Technology

    KDLB Karachi Dock Labor Board

    KICT Karachi International Container Terminal

    LMM Locally Manufactured Machinery

    LPI Logistics Performance Index

    LTF-EOP Long-term Financing for Export Oriented

    Projects

    LTFF Long-Term Finance Facility

    MAF Million acre feet

    MFA Multi-Fiber Agreement

    MFN Most Favored Nation

    MOC Ministry of Commerce

    NABA National Accountability Bureau

    NLC National Logistics Cell

    NLTA Non- Lending Technical Lending

    Assistance

    NTC National Tariff Commission

    NTCIP National Transport Corridor Improvement

    Program

    NTTFC National Trade and Transport Facilitation

    Committee

    OIC Organization of the Islamic Conference

    OTRI Overall Trade Restrictiveness Index

    PaCCS Pakistan Customs Computerized System

    PIFFA Pakistan International Freight Forwarders

    Association

    PITAD Pakistan Institute of Trade and

    Development

    PPP Pakistan People’s Party

    PPP Public-Private Partnership

    PSCB Pakistan Public Sector Capacity Building

    PTA Pakistan Tanners Association

    QRs Quantitative restrictions

    R&D Research and Development

    RCA Revealed comparative advantage

    REGS Rapid Export Growth Strategy

    SAFTA South Asian Free Trade Agreement

    SBP State Bank of Pakistan

    SMART System of Market Analysis and Restrictions

    of Trade

    SME Square Meter Equivalent

    SROs Statutory Regulation Orders

    T&C Textiles and Clothing

    TDAP Trade Development Authority of Pakistan

    TFP Total factor productivity

    TIR Transports internationaux par la route

    UAE United Arab Emirates

    UK United Kingdom

    UNCTAD The United Nations Conference on Trade

    and Development

    US United States

    WAPDA Water and Power Development Authority

    WBI World Bank Institute

    WDI World Development Indicators

    WeBOC Web Based One Customs

    WITS World Integrated Trade Solutions

    WTO World Trade Organization

  • PAKISTAN

    EXPORT DIVERSIFICATION AND TRADE POLICY

    TABLE CONTENTS

    Executive Summary ........................................................................................................... i Chapter I: An Economy Shaped By Crises .....................................................................1

    A. Introduction...................................................................................................................1

    B. Crisis Number 1: Public Policy and the “Mussalman problem” ...................................5

    C. Crisis Number 2: Relations between India and the New State of Pakistan ..................9

    D. Crisis Number 3: The Ideological Shift in Public Policy............................................12

    E. Crisis Number 4: The Evolving Pattern of Governance .............................................13

    Chapter II: Competitiveness and Trade Outcomes ......................................................19

    A. Introduction.................................................................................................................19

    B. Growth, Diversification and Sophistication................................................................21

    C. Firm Dynamics in Exporting: Entry, Exit and Survival .............................................35

    Chapter III: Trade Policy for Export Diversification ..................................................51

    A. Introduction.................................................................................................................51

    B. Trade, Tariff, Tax Policy in Pakistan: Evolution and the Current Regime .................51

    C. Current Tariff and Trade Policy Regime: A Descriptive Analysis .............................54

    D. The Nature of Distortions from Tariff Policy ............................................................57

    E. Analysis of Anti-export Bias of the Tax and Tariff Regime.......................................61

    F. The Presence of Anti-Export Bias from Exchange Rate Management ......................64

    G. Other Measures Affecting Trade ................................................................................65

    H. Export Subsidies: An Assessment of Incentive Bias ..................................................68

    I. Compensatory Support to PTA Users.........................................................................69

    J. Institutional Framework for Trade Policy-Making: Lack of Coherence ....................72

    Chapter IV: Domestic Factors Affecting Exports.........................................................76

    A. The Overarching Challenges: Shocks, Stability and Scarcity.....................................76

    B. Economic Governance, Labor Policy and Access to Finance ....................................79

    C. Providing Basic Infrastructure for Commerce ............................................................82

    D. Strengthening Economic Governance through Better Regulation ..............................84

  • E. Achieving Flexible Labor Markets and Enhancing Skills ..........................................86

    F. Expanding Corporate Access to Finance ....................................................................87

    G. Absorbing Technology and Fostering Corporate Innovation .....................................88

    H. Trade Facilitation and Logistics for Exports ..............................................................89

    Chapter V. Market Access and Preferential Trade Agreements ..............................111

    A. Trade Preferences and Pakistan’s Trade ...................................................................112

    B. Welfare Effects of Tariff Liberalization in Pakistan.................................................113

    C. Fiscal impact and welfare gains ................................................................................115

    D. Effects of Full Tariff Liberalization on the Intensive Margin of Imports .................116

    E. Fiscal Impact and Welfare Gains ..............................................................................117

    F. Beyond Tariffs and Market Access...........................................................................118

    G. Trade Creation and Diversion Effects of Pakistan’s PTAs .......................................121

    H. PTAs Impact on Export Growth ...............................................................................123

    Chapter VI. Trade Policy Research and Analysis ......................................................126

    A. Introduction...............................................................................................................126

    B. Institutional Context of Trade Policy Analysis.........................................................127

    C. A Transformative Paradigm—From FTIP to TDAP ................................................127

    D. PITAD Structure and Management ..........................................................................128

    E. Research Activities ...................................................................................................129

    F. The New Strategy for Research ................................................................................130

    G. Activities under the

Recommended

View more >