Tariff Policy, Trade Reforms, and Learning Lessons: Can Pakistan Finally Get It Right?

Pakistan's trade future hinges on embracing liberalization and learning from past mistakes. Will the National Tariff Policy 2025-30 be the key to unlocking growth?

Pakistan's trade winds are shifting, with the National Tariff Policy 2025-30 aiming to chart a new course. The key question is: can Pakistan learn from its past inconsistencies and finally embrace a truly open and competitive trade environment?

The Myth of Tariff Liberalization as the Villain

Some critics point to the 1990s, claiming that tariff cuts led to economic woes. However, the data tells a different story. Pakistan's golden age of export growth, a whopping 13% annually, actually followed deep trade reforms between FY2002 and FY2008. Exports more than doubled! The real trouble began after 2008 when Pakistan slammed the brakes on liberalization, introducing protectionist measures.

The High Cost of High Tariffs

For the last 15 years, Pakistan has been losing ground in the global export market, while other countries are surging ahead. These high tariffs don't just hurt exports, they also stifle domestic producers. It's a lose-lose situation!

Negotiating Power: It's Not About the Tariffs

Forget the myth that high tariffs are a negotiating chip. Countries like Vietnam and Turkey prove that lowering tariffs unilaterally can actually pave the way for stronger trade deals. Pakistan's high-tariff approach has only resulted in shallow, largely symbolic free trade agreements.

A New Path Forward

Pakistan needs to pursue a strategic trade policy. That means deepening existing agreements, seeking entry into RCEP, and forging comprehensive FTAs with key players like the UK and EU. This isn't just about short-term gains; it's about building a stable, rules-based system that attracts investment and drives long-term growth. Think of India’s success in expanding trade ties; Pakistan can follow suit.

CPEC Phase-II: A Golden Opportunity

With Pakistan and China restarting work on CPEC Phase-II, the timing couldn't be better. This phase aims to transform Pakistan into a regional industrial hub. But to achieve this vision, Pakistan needs to import machinery and capital goods without being hamstrung by high tariffs.

Learning from the Best

Countries like China and Vietnam have lifted millions out of poverty through similar reforms. Pakistan can do the same by dismantling protectionist policies, unlocking growth, and embracing a future of shared prosperity.

So, will Pakistan finally seize this opportunity? The National Tariff Policy 2025-30 represents a chance to break with the past and embrace a brighter, more prosperous future. Here's hoping Pakistan is ready to play ball!