Pakistan Argentina & Mercosur Trade and Investment
Ministry of Commerce is working on formulation of an Export Enhancement Strategy with a focus on promotion of new and emerging products/sectors as well as exploring non-traditional export markets for enhancing export. Latin Americas is one of the most important non-traditional markets where Pakistan’s market share is negligible despite a huge potential for Pakistan’s exports to the region in both traditional and non-traditional export sectors. To achieve greater market access in the region, Ministry of Commerce had signed a Framework Agreement on Trade with Mercosur (a trade block comprising Argentina, Brazil, Paraguay and Uruguay) in 2006 with a view to sign a Preferential Trade Agreement (PTA) leading to a Free Trade Agreement (FTA). Pakistan has an annual bilateral trade of US$ 1 billion with Mercosur countries. Pakistan’s annual bilateral trade with Argentina is US$ 200 million which has a potential to increase to US$ 800 million. FTA will provide an opportunity to address trade deficit with Mercosur countries. Pakistan’s imports of Soya bean Oil and Cake provide a lucrative market for Argentina and Brazil, while Pakistan is mainly focused on Textile exports. Pak-Mercosur FTA will create further win-win opportunities for both Argentina and Pakistan.
Ministry of Commerce has been making efforts to restart negotiations on Pakistan´s bid for PTA/FTA with Mercosur. Due to the consistent efforts of the Ministry, Pakistan’s request will be taken up by the External Relations Group of Mercosur (GRELEX) in early 2019.
As Pakistan’s request is being taken up by External Relations Group of Mercosur, the Ministry of Commerce has intensified its Trade Diplomacy efforts by engaging Embassies of Brazil and Argentina in Islamabad.
A Preferential Trade Agreement with Mercosur will:
- Provide opportunity to diversify products as well as markets and enhance trade with the Latin American countries.
- Introduce new products in Pharma, Information & Communication Technology, Auto parts and Light Engineering sectors in the market and diversify our export basket.
- Benefit Textile Sector which is currently Pakistan’s biggest export sector to the region
- Strengthen and further consolidate our business and trade relations in the region.
- It will provide level playing field to Pakistan vis-a-vis its competitors in Latin Americas.
Mutual Collaboration and Investment:
- Argentina and Brazil are among world leaders in Agro food production and development of Agricultural technology especially in the areas of production innovation in seeds and food processing. There is huge scope of Technical assistance and investment from Brazil and Argentina in agricultural conservation and food processing.
- Pakistan and Argentina may engage in mutually beneficial collaboration and technology transfer in agro food processing, meet processing, livestock rearing and fattening etc.
- MoC is focused on increasing and incentivizing ICT investment collaboration with Latin American countries as there is significant potential in the region for export of IT-enabled services, incubation and innovation, e-commerce etc.
- Both countries can mutually benefit by enhancing cooperation in Chemicals and Pharmaceutical sectors especially value chain and import regulations/certifications in Pharmaceutical Sector.
- Mining is another area for collaboration between Pakistan and Argentina.