Apparel Sourcing Intelligence - Worldwide

Pakistan’s “Turkish Special Economic Zone” claim and Turkish FTA offer strain credibility

Turkey’s Prime Minister boasted on February 17 he would work to finalise a Free Trade Agreement with Pakistan by June 2015 – but neither he nor his Pakistani colleague mentioned Turkey’s crippling duties on Pakistan’s textile exports. A Pakistani claim of a “‘Turkish Exclusive Special Economic Zone’  seems equally unfounded.

After a meeting in Pakistan between the two countries’ Prime Minsters on February 17, Pakistan’s Nawaz Sharif said “We are embarking on new trade liberalisation initiatives,” while Turkey’s Ahmet Davutoğlu added “If a free trade agreement is needed, we will work to finalize it by June.” Pakistan’s Commerce Minister  announced on February 23 he would conduct a pre-FTA study and and hold extensive discussions with stakeholders to strike the best possible deal. 

But at the same time, Pakistani garment exporters urged the Pakistani Prime Minister to convince his Turkish counterpart  to waive a Turkish ‘Safeguard Measures Duty’ (SMD) of 42.2% on Pakistan’s apparel imports.

“The original Customs Duty is 9.2% on garments, but 42.2 percent SMD increases it to 52%” said Pakistani garment makers’ spokesman Ijaz A Khokhar. “Similarly, Pakistani fabric exporters pay 35 percent total Customs Duty with an additional 28.6 percent SMD.”

Pakistan’s Board of Investment announced on February 19 that a “‘Turkish Exclusive Special Economic Zone’ would be established in Pakistan.”  No mention of any investment by any Turkish business was made during Davutoğlu’s visit. But at a subsequent Pakistan-Turkey Business Forum, “fields of investments” were identified in the automotive industry, infrastructure development, energy, air transportation and aerospace, agriculture, electronics and furniture industry.

Speaking at the Forum, Nihat Zeybekci – Turkey’s Minister for the Economy – said that Turkish businesses “do not want to be in competition with Pakistan.”

Which seems to imply no Turkish investment in Pakistan’s cash-strapped apparel or textiles industries

 

No details were given, and no confirmation has come from any Turkish source