It’s doubtful if the proposed free trade agreement with Thailand will bring Pakistan much benefits. Historically, such agreements have failed to give favorable terms to Pakistani exporters. Several high potential export items received no concessions under FTAs with China, Malaysia and Indonesia.

Following the free trade agreement, Pakistan’s imports from Thailand will increase to $1.71 billion while Pakistan’s exports will increase to a paltry $160 million, pushing the trade deficit to $1.54 billion. Pakistan’s exports to Thailand without the FTA have hovered around $109 to $118 million in the last four years.

Pakistan’s top 50 high potential export items represent a total trade potential of $2.8 billion for the Thailand market. It is another matter that the potential was not exploited by Pakistan’s exporters as about 38 per cent of these high potential items are already tariff exempted by Thailand. So the FTA may not bring much benefit to Pakistan. Thailand’s high potential exports to Pakistan are not capital goods, but consumer goods, making the potential trade deficit that will come about after the FTA harder to justify. It may impact the domestic consumer industry more severely.

One problem is that Pakistan has failed to secure concessions, where other countries have either got zero or very low duties.