Tariff Parity Can Help Pakistan, Egypt Boost Trade Volume

By Arsalan Ali

ISLAMABAD, April 27 (WealthPK): Pakistan and Egypt can enhance their trade volume exponentially provided Islamabad and Cairo begin negotiations to bring about tariff parity and put in place more accommodating visa regimes for businessmen.

Pakistan’s exports to Egypt are subject to high tariffs ranging from 0 to 40%. Egypt, on the other hand, is granted access to the Pakistani market at relatively lower tariffs ranging from 0% to 20%.

If Pakistani exporters are to succeed in the Egyptian market, they must reduce their production costs to be competitive.

Pakistan can also enhance export competitiveness by ensuring small and medium enterprises’ access to finance, low-interest loans, and launching skill training/development programmes for them.

Moreover, exporters should be educated on the regulations and standards in place in Egypt.

Both countries should make their visa regimes more accommodating, particularly for businessmen.

It is to be noted here that Pakistan’s exports of goods to Egypt grew by 48.14% to $105.63 million during the fiscal year 2020-21 compared to $71.3 million in fiscal 2019-20, according to the United Nations COMTRADE Database on International Trade.

During the year, Pakistan exported cotton ($65.05 million), plastic ($6.09 million), manmade staple fibres ($5.19 million), rubber ($5.05 million), pharmaceutical products ($4.38 million), vegetable textile fibres not specified elsewhere, paper yarn, woven fabric ($3.79 million), optical, photo, technical, medical apparatus ($2.39 million), articles of leather, animal gut, harness, travel goods ($1.93 million), organic chemicals ($1.28 million), salt, sulfur, stone, plaster, lime, and cement ($1.18 million), paper and paperboard, articles of pulp, paper and board ($1.10 million).

According to Business Research Council (BRC), Pakistan has a $1.1 billion export market in Egypt, primarily driven by the pharmaceutical and surgical sector ($258 million), textile sector ($226.5 million), agriculture sector ($105.7 million) and plastic and rubber sector ($62.3 million).

According to BRC, rice is a staple food in Egypt, and its import has increased from around the world in recent years. The total value of rice imports in 2020 was $46.7 million, with Egypt importing 66% of its rice from India and only 0.8% from Pakistan.

In recent years, the Egyptian government has established four regulatory authorities to closely monitor imports. This has resulted in higher non-tariff barriers for Egypt’s trading partners, including Pakistan. Some of these measures include requiring import licences, technical standards on approximately 860 products, labelling and packaging requirements, and veterinary quarantine regulations.