THAILAND AND PAKISTAN are set to double the value of bilateral trade within five years, while planning a free-trade agreement starting with seven sectors.
After leading Thai delegations to Pakistan early this week, Prime Minister Yingluck Shinawatra said the two countries set up plans to raise the value of annual two-way trade to US$2 billion (Bt64 billion) within five years, from last year’s $1 billion.
Deputy Commerce Minister Yanyong Phuangrach said the ministry, which is responsible for trade promotion, had been ordered to increase exports to Pakistan by 20 per cent a year from now on.
Moreover, Bangkok and Islamabad agreed to negotiate an FTA that will focus on seven priority areas. The seven sectors are infrastructure and logistics development, processed and halal food, fishery, automobile parts, energy, eco-tourism and healthcare tourism, and jewellery development and trading.
The agreements were struck after the first meeting of the two nations’ Joint Trade Commission (JTC). The meeting also agreed that Thailand should set up a trade office in Karachi, the largest and busiest city of Pakistan.
“Pakistan offers new potential for Thailand to trade and invest more because of its emerging economic growth. It can [also] be a gateway for Thailand to penetrate other countries in Central Asia,” Yanyong said.
Pakistan now will be considered a good source of raw materials to support Thai jewellery production. In return, with its expertise in jewellery design and cutting, Thailand will transfer knowledge to Pakistan.
Thailand is also set to become a centre for the supply of halal foods to Pakistan. It will help the Pakistani food industry to bring its own production up to international standards so that it can not only supply its domestic market but export to nearby countries in Central Asia. Thailand aims to increase the export of machinery for food production to Pakistan from last year’s value of $73 million.
Thailand will also help develop Pakistan’s fishery and preserved-food industries. As Pakistan has plenty of fishery resources, Thai investors have a great opportunity to set up fish-processing plants there. Last year, Thailand imported about $28 million of fishery products from Pakistan.
Moreover, Thailand will help Pakistan develop its agricultural sector by transferring some knowledge and technology to farmers.
Pakistan is Thailand’s second-largest trading partner in South Asia. It is considered as big market for Thailand with its 180-million population, while it can be a bridge to connect with the Central Asian region.
Isara Vongkusolkij, chairman of the Board of Trade of Thailand, said Pakistan was an interesting market as it could be a gateway to other countries in Central Asia.
However, Thai traders and investors have faced some obstructions when attempting to penetrate this market. The FTA should help eliminate tariffs, which can be as high as 30-50 per cent. Also, the banking system is quite slow and not supportive of business growth. Isara urged Export-Import Bank of Thailand to facilitate Thai enterprises by giving more credit and liquidity to traders.