The USA’s placing of a tariff of 19 percent on Pakistani goods was bound to hit hard, for Pakistan, while running an overall balance of trade deficit, has a trade surplus with the USA. Though this trade surplus is more varied than is sometimes thought, it consists mostly of textile exports. This was perhaps inevitable, considering that the textile sector is an export staple in an economy running a chronic trade deficit. However, because the textile industry has such importance over such a long time, it has come to claim a special position. This has allowed the accusation of rent-seeking behaviour to be made, especially of the export sector. That rent-seeking behaviour translates into seeking to obtain advantages from the government to make profits, rather than focusing on the market they wish to explore. Other sectors, like rice, salt, surgical goods, and sports goods also export.
The problem before Pakistani manufacturers is quite specific. It is not that they will be priced out of the market anytime soon. US manufacturers, even if they take advantage of the new tariffs, will take time to be up and running. Meanwhile, Pakistan has found its competitors in the US textile market at the receiving end of even higher tariffs, which has created the opportunity of substituting for these competitors. Since the real growth sector is in what is called fast fashion, which consists of apparel meant only to be worn on a few occasions before being discarded, the real challenge is market penetration. The measures that have been proposed by the Commerce Ministry after consulting stakeholders relate to existing complaints and would merely make life easier for the manufacturers rather than help them with their main issue. It is almost as if they are being left to get on with the business as best they can, except that they are to be coddled, not because they are to help exports, as because they help the exporters.
In a way, the demands being made are ones which should have been implemented already. There is no word but sad for the demand that held-up refunds should be paid. That should be done by any honest state, and for all manufacturers, not kept as some sort of special prize for export high-performers. Instead of the tired measures that have been proposed, the government should work out how it can actually help exports rather than just get out of the way.
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