Pakistan’s Free Trade Agreement (FTA) talks with Turkey are nearly at a breaking point, as the commerce ministry has asked the government for clearance to take constant contentions with Turkey to the World Trade Organisation (WTO) after prolonged discussions on FTA between the two countries have come to a deadlock.
The contention that has lead to the standstill is the issue of grant of GSP+ status by Turkey that Pakistan argues is an obligation, given that Turkey and the European Union are part of a customs union. Pakistan has also asked for a reversal of a set of additional duties that the Turkish government imposed on Pakistani products having high export potential in the Turkish market back in 2011.
The FTA talks have been ongoing since February 2015, where it was predicted that the negotiations would conclude by the end of the year. However, three years later, the terms of the agreement have still not been decided upon. The FTA was projected to increase bilateral trade to $5 billion between the years 2016 and 2019 and to $10 billion by 2022.
There is pressure on Pakistan to make the agreement work, which is why the ministry is appealing to take the matter to WTO, to ensure some movement in the process. Pakistan is already isolated from Iran due to its unilateral backout of the gas pipeline. Moreover, Turkey’s friendship is important for CPEC, due to projects like “Middle Corridor” linking Turkey to the Caucasus and the Central Asian Republics via crossing the Caspian Sea.
However, Pakistan should keep the interest of its exports first. The last financial year saw a fall in exports, and since then, the government has been prioritizing export. As a result of duties, Pakistan’s exports to Turkey plummeted from $906 million in 2011 to $282m in 2017; thus it is a necessary point to stick to.