Pakistan wants Japan and Canada to allow duty free access for its leather garments. Currently Japanese importers of leather garments have to pay a high duty rate for the import of leather garments from Pakistan. Previously these importers and brands were using China as their manufacturing base and Pakistan was shipping finished leather to China for conversion to leather products like jackets. However, with the rise of costs in China Japanese importers have been trying for the last two years to find another production base.

Pakistan is well suited to make value added finished jackets for the Japanese market, but due to duty free access from Vietnam, it is cheaper for Japanese customers to source Pakistani finished leather and get the garments made in Vietnam. Although the FOB price offered by Pakistani exporters for the same product is more competitive import duty costs are cheaper for the Japanese importer when working through Vietnam.

Duty free access to the Japanese and Canadian market would mean Pakistan would be able to deliver more competitive and shorter lead time deliveries to them. A preferential trade agreement would make it easier for value added Pakistani products to enter the Japanese and Canadian markets.