Pakistan’s textile exports to Turkey dropped to around $500mn from $1bn

Pakistan’s bilateral trade with Turkey grew at good pace and crossed one billion dollar mark in 2010-11, but it started declining after the imposition of safeguard duties in August 2011 by Turkey to protect its domestic industry. The Government of Pakistan had been raising the issue at the highest level with the Turkish officials, but there had been no developments.

Pakistan’s textile exports to Turkey has declined by almost 50 percent from $1 billion to around $500 million. Turkey also placed the extra Customs Duty on apparel imports from Pakistan, hampering mutual trade growth though it has no threats from Pakistan garments since it manufactures 95 per cent of fashion and casual wears.

As both countries are engaged in talks over Free Trade Agreement (FTA), the exporters have urged the government to convince its Turkish authorities to waive Safeguard Measures Duty of 42.2 percent which Turkey has placed on Pakistan’s apparel imports.

Major items of exports to Turkey include articles of apparel, cloth, knitted crochet, and articles of apparel of textile material, cotton fabric (woven), chemical material and product, chemical elements and compounds, cotton yarn, leather and rice.

PRGMEA central chairman Ijaz Khokhar said that Pakistan Readymade Garments Manufacturers and Exporters Association have raised the issue with the officials of the Textile Ministry in a meeting held at PRGMEA House here on Saturday. The meeting was also attended by the Executive Committee and vice chairman Naseer Malik. He said that original Customs Duty is 9.2 percent on garment products, including denim, martial arts uniforms and home-textiles but 42.2 percent SMD increased the levy to 52 percent which is too high to afford on the world market.

Ijaz Khokhar, addressing the meeting, said that Pakistani garments exports to Turkey had never posed a threat to its local industrial growth and the SMD was an additional Customs levy that caused a big financial trouble to Pakistani exporters and Turkish importers as well. Pakistani fabric exporters pay 35 percent total Customs Duty with additional 28.6 percent SMD at the import stage in Turkey. In fact, the higher duties should be brought to the original size to help augment both nations’ mutual trade.

Vice Chairman Naseer Malik said that initially, Pakistan had requested Turkey to withdraw the additional duties as Pakistan has a small share of these products in Turkish markets i.e. 4.54 percent for fabrics and 2.3 percent for garments at that time. But Turkey maintained that since the safeguards were imposed on MFN basis, it was not possible to lift the same on Pakistani exports specifically. He said that abolition of SMD will help Pakistani exporters reach Central Asian and Eastern European nations with their garment goods besides taking its trade with Turkey to a billion dollar.

According to statistics, bilateral trade decreased from $1.082 billion in 2010-11 to $630.46 million during current fiscal, showing 42% decrease. Pakistan’s exports decreased from $906.58 million in 2010-11 to $455.83 during current fiscal year, which is a 50% decrease. Pakistan’s imports from Turkey showed a small decrease from $176.26 million in 2010-11 to $174.63 million which was only one percent decrease.