Pakistan-Turkey Trade Relations; Pakistan's Trade Deficit

Pakistan and Turkey agreed to initiate the process for finalizing the Free Trade Agreement (FTA) as the two countries remain keen on increasing trade revenues to $2 billion by the end of 2012. Bilateral trade between the two countries increased 25 to 30 percent in the last five years, but are currently slowed due to the global fiscal crisis. The two nations concluded their talks at the 13th session Pak-Turkey Joint Ministerial Commission (JMC), October 14, 2009. After signing a memorandum of understanding (MOU), Commerce Minister, Makhdoom Amin Fahim, and Turkish Minister of State for Science and Technology, Mehmet Aydin, stated that the two countries would vigorously pursue the negotiations to finalize the FTA as early as possible.

The JMC also decided to expedite the initiatives of the Pakistani-Turkish Business Council. The Council would meet in 2010, underlining the necessity of producing effective private sector platforms to facilitate bilateral trade. Pakistan and Turkey also emphasized the importance of enhancing trade through regional organizations such as the Economic Cooperation Organization (ECO) and the Organization of Islamic Conference (OIC).

Turkey is in need of raw materials, which are imported from Pakistan. In exchange, Turkey will invest in Pakistan with its specialized expertise in the construction, agriculture, energy and mining sectors. Current trade volume between Turkey and Pakistan totals $740 million. Turkish exports to Pakistan are $155 million, while Pakistani exports to Turkey amount to $585 million.


Pakistan’s September Trade Gap Narrows By 55.9%

In related trade news, Pakistan’s trade deficit narrowed by 55.9 percent in September as imports declined at a faster rate than exports.

According to data by the Federal Bureau of Statistics in Islamabad, the trade gap narrowed to $897.9 million in the third month of the fiscal year, from $2.03 billion merely one year ago. Overseas sales fell 14.2 percent to $1.52 billion, while imports fell 36.4 percent to $2.42 billion.

Pakistan’s trade deficit narrowed 18.5 percent to $17 billion in the fiscal year ended June 30, from $20.7 billion in the previous 12 months. Exports fell 6.7 percent to $17.8 billion and imports dropped 12.9 percent to $34.8 billion.

Pakistan is seeking to boost exports to sustain growth in a country where the World Bank estimates two-thirds of the population of 160 million people survive on less than $2 a day.