Pakistani exports may face trouble from importing countries’ restrictions, according to World Bank economist Anna Tsum. She said that 70 percent of Pakistan’s exports could face loss of market access unless exporters could upgrade compliance with emerging global requirements, particularly enhanced traceability mechanisms and enhanced labour standards. She made these remarks at a Tadlab event, “Trade. Tariffs and beyond- Building Pakistan’s Export Economy’. Thus she managed to highlight an issue that deserves more attention, that of non-tariff barriers.
An issue that is causing increasing concern among Western economists is how the goods they are importing are produced. Especially with manufactured goods like garments, Western governments have placed requirements that prescribe certain rules for the labour that has been engaged in the production of the goods. This is not purely a do-gooder requirement, for often the requirement has been lobbied for by local manufacturers, who resent the price advantage Pakistani manufacturers enjoy because of cheaper labour. Particularly irksome is the cost of compliance (with stringent labour laws) Western manufacturers face, which Pakistani manufacturers avoid because the laws are not there, or because inspectors are routinely bribed. It needs to be understood that these requirements are also supported by consumers with a socially active conscience, who refuse to buy clothes made by exploited labour. Manufacturers should realize that they are not limited by compliance with these standards only for the markets they are required, but can export to other markets, using their compliance as a selling point. Also, it should be noted that these standards will be increasingly adopted worldwide, so if Pakistan wishes to sell it should ensure that it is in compliance.
At the same time, the government should keep a weather eye open for the conversion of these non-tariff barriers into a weapon, the way US President Donald Trump recently did with tariffs. Another problematic area will be observing different standards: our exporters might be trapped into a situation where they face different requirements in different markets. The government must of course be ready to help in emergency situations, but the best way of keeping away difficulties would be to keep collecting information about new regulations and disseminating it to the industry concerned. This should form an integral part of the economic diplomacy of the country, which should not be limited to seeking out new export markets.
