Pakistan’s free trade agreement with Turkey may not happen any time soon. Despite Pakistan’s willingness to open up the auto sector, Turkey has shown reluctance to reduce duties on textile products, an important demand from Pakistan.

Rules of origin offered by the Turkish side for Pakistani products are more restrictive than those applied by the EU. Turkey is not letting the textile sector enter its market easily and has offered to reduce duty by 25 per cent on textile items in five years with the remaining 75 per cent duty to be revisited after this period.

Turkey wants a generous offer from Pakistan but is not ready to reciprocate or to meet Pakistan’s demand for inclusion of three or four textile products. The diaper industry in Pakistan wants a pragmatic approach to concessions on raw material import against import of finished goods to boost the local industry, generate employment and tap export markets.

Pakistan aims to have a targeted approach to seek tariff reduction from Turkey on high potential export items from Pakistan while also reducing its customs duties for raw material imports and machinery that is used for local manufacturing. In the FTA with China, many of Pakistan’s leading exportable items were given lower concessions than Pakistan’s competitors from Asean, which worsened its competitive position.