ISLAMABAD: Pakistan’s economy is least integrated in the global value chainand hence, will not suffer significantly from the recent US-China trade warin the short-term.
However, Pakistan should revisit its trade and industrial policy and directits production incentives and preferences under free trade agreementstowards products that are in demand in countries with lower trade barriers,higher consumer confidence, a stable growth outlook and potential forsupply-chain integration.
This was the crux of deliberations by trade experts at a special seminar on‘Where does Pakistan stand in global trade war?’ organised by theSustainable Development Policy Institute (SDPI) on Monday.
Speaking on the occasion, National Tariff Commission member Roubina Athersaid that the greatest threat of trade war is protectionism, which in turnwill shrink the global trade volume. “We should not be over-concerned aboutthe ongoing global trade war, mainly between China and the US, as Pakistanis not so much integrated in the global value-chain,” she said. If thetrade war goes further, the textile sector and the apparel market maysuffer in the long-term, she added.
Also addressing the seminar, SDPI Joint Executive Director Dr Vaqar Ahmedsaid that the ongoing trade war between China and the US may cause a risein the cost of production and raw material in developing countries, whichin turn could bring inflation and threaten the global economic recovery.“As trade declines and commodities output falls, this could also result inlower wages and unemployment,” he said.