INCREASING BELGIUM-PAK TRADE

TARIQ AHMED SAEEDI (tariqsaeedi@hotmail.com)
Mar 23 - 29, 2009

Pakistan's export basket has three or four product categories mainly composed of cotton yarn and cotton cloth, yarn, knitwear, bead wear, and rice. These products constitute approximately 70 percent of total export revenue. While value addition of exporting products can increase export revenue, enlarge the basket, and increase in numbers of importing destinations reorganization of trade relation with European Union can give a major boost to trade. What is required is the long term planning, said Abid M. Husain, Trade Commissioner, Embassy of Belgium, Economic & Commercial Representation Pakistan & Afghanistan in an interview.

"During my almost thirty years of working in Pakistan, I construed haphazard approach a common trait in government functionary that despite of having resilience acts upon temporary solutions to the problems," he said referring to disband of Pakistan's fisheries exports in European Union and then its withdrawal. He was of the view that repainting and repairing of shelters was to hoodwink the monitoring delegation. It is worthwhile to note that the basic objection by the EU was unhygienic conditions of shelters in which seafood was treated. "They should consider that maintaining world standard is necessary for them and they could not survive without it," he advised to exporters of seafood.

Fresh food, red and white meats intended for exports to member states of European Union need to follow EU rules and conditions. Belgium is one of the 27 member states of EU and involved in trading mostly with regional economies and USA. Belgium total trade volume hovers at $500 billion-$269 billion exports and $260 billion imports according to an estimate-of that Pakistan's share was negligible. During the last fiscal year, out of total Pakistan's exports to western European region of $5.02 billion, which was the highest as compared to exports to other regions, exports to Belgium accounted for $409 million and imports $237 million. Netherlands that is a neighbouring and main Belgian trade partner and United Kingdom absorbed sizeable quantum of Pakistan's exports, however, the export figure was more than cumulative exports of $330 million to east European region in the period under review.

Belgium-Pakistan bilateral trade can further be increased, commented Husain. There are areas where both [nations] can cooperate to enhance bilateral trade. "Belgium is a lucrative market for Pakistan's dairy products, for instance," he specified. There is a surplus of dairy products in Pakistan, which is the world fourth largest milk producer. He believes that only three percent of milk produced in Pakistan is utilized and 97 percent is wasted because of inexpert milking, lack of refrigeration, pasteurization and inapplicability of other modern methods. Being an industrialized nation, Belgium can export technology to Pakistan, he said and added Belgian exports compose of modern machineries, technologies related to agriculture.

Belgium has short of natural resources and its agriculture forms 1.5 percent of its GDP. Perhaps, for a country with little over 10 million population domestic agro-food produce may suffice local demands. Its main exports are industrial and farm inputs, fertilizers, seeds, equipment, etc. and imports foodstuffs and diamonds, etc. "It is not that all food products imported in Belgium are consumed locally, in fact they are re-exported to trade partners, neighbouring states," says Husain. 'While value added dairy products can be exported to Belgium, established food processing industry in the country is in high demand of raw products.'

Replying to a question, he said, the country could become a transit route for Pakistan's products to Europe. 'Belgium can become a transit route for Pakistan's goods to enter into the hinterlands of Europe.' It has two seaports that are instrumental in expanding trade across northern sea, he says. Government of Belgium is promoting Flanders as transit region world over. It is seeking investment into the region. Because of its location at the centre and integrated infrastructure, Flanders gives easy access to Netherland, Germany, France, Luxembourg, and across Europe. A report mentioned Flanders Europe's best base for logistics and distribution operation. In a survey conducted by Ernst & Young, it was reported as having best telecommunication, transport and logistics infrastructure. The inland waterways provide it an edge over other European states having strong infrastructure.

In addition, Flanders has one of world's largest road and railways networks, according to a report. The importance of region increases because it has large portion of Belgian workforce and its regional gross development products account for 60 percent of national GDP. Belgium is providing trade routes for Pakistan's textile products to European nations. Husain did not refer to any present arrangement between the two in terms of transit trade, but he pointed out re-export of Pakistani products from Belgium. Can specific agreement in this regard be beneficial for increasing trade volume especially Pakistan's exports?

EU block is gaining strength with inclusion of European state and inter trade increasing among member nations. Entry of Turkey and Croatia will leave behind only 18 ex-block European states. Non-EU and non-European nations can benefit from rising trade by raising quality of their trades at par with satisfactory level. They can go into trade agreements that ensure proportional returns on raw materials converted in to finished goods in EU. For example, Pakistan's investors formulate partnerships with Belgian food processed companies. This will unravel two advantages. One, this will make use of wasted unrefined dairy products, red meats or poultry products through modern technology. Secondly, it will exceed foreign exchange earning beyond what is earned while supplying raw goods. The same can be applicable to other goods.

Apart from this, involvement of mutual stakes may reduce loses that appear after cancellation of trade shipments in a consequence of downgraded trade quality. Bilateral trade enhancement is beneficial for both Belgium and Pakistan. For Pakistan, it implies more exposure to European states, and for Belgium, it is a gateway to low cost agriculture products in the wake of contracting economic growth and budget deficit, which according to a recent IMF report, will require Belgium to cut down public spending in this fiscal year.