Muneeb ur Rehman

Pakistan struggles to accrue the trade benefits with other members of South Asian Association for Regional Cooperation (SAARC) owing to the presence of non-tariff barriers. In an interview with WealthPK, Abid Qayyum Suleri, Executive Director of Sustainable Development Policy Institute (SDPI), said that the country’s trajectory of sustained growth and development hinged on its ability to trade with regional countries. “Unfortunately, non-tariff barriers are stumbling blocks to reap the fruits of mutual trade.”

Non-tariff barriers include diverse non-monetary constraints, such as documentation prerequisites, technical or safety standards, and packaging specifications. Regulatory agencies, authorised by legislative statutes, commonly establish both tariff and non-tariff barriers. As per the data available with WealthPK, SAARC countries still account for only 5% of the total regional trade, contrasting sharply with the NAFTA region, where it exceeds 40%, the EU with 68%, and ASEAN with 27%.

Source: Ministry of Finance

Abid Suleri added that non-tariff barriers are leading to increased transaction costs, delays and complexities in cross-border trade, thereby hindering the efficiency and competitiveness of businesses in Pakistan.When asked about the impact of non-tariff barriers on development, he said: “Restricted trade with SAARC countries hampers economic progress by limiting market access, stifling business efficiency, and impeding the overall development potential that could otherwise be realised through seamless regional trade.”

He advocated enhanced connectivity among SAARC countries, emphasising the need for improvements not just in road and railway networks but also in ports, shipping and aviation. “This would contribute to and elevate mutual connectivity.” He added that due to the existence of non-tariff barriers, Pakistan is unable to connect itself with the regional energy grid. He called for the establishment of SAARC power grid. “The SAARC countries have a huge population and consumer base. With the establishment of a regional energy grid, Pakistan would be able to trade energy sources technology.”

Credit: INP-WealthPk