the pakistan-uk bilateral trade analysis · exchange rates against us dollar (end of month) 0.40...

THE PAKISTAN-UK BILATERAL TRADE ANALYSIS

U S A M A E H S A N K H A NR E S E A R C H A S S O C I A T E

Economic Outlook

Bilateral Trade overview

Potential Products

01

SWOT Analysis

CONTENTS

Recommendations

2

03

04

05

02

2013

$ 42453

2014

$ 46479

2015

$ 43976

2016

$ 400502017

$ 38847

GDP per capitaECONOMIC OUTLOOK

3Source: IMF

Exchange rates against US dollar (end of month)

0.40

0.50

0.60

0.70

0.80

0.90

1.00

Nat

ion

al c

urr

ency

per

USD

Pound Euro

4Figure 2: Official exchange rate of Euro and Sterling Pound against USD, International Monetary Funds

ECONOMIC OUTLOOK

P O P U L AT I O N

G R O W T H R AT E

0 . 7 %

R E A L G D P

G R O W T H R AT E

1 . 7 %

U N E M P LO Y M E N T

R AT E

4 . 4 %

F O R E I G N

D I R E C T

I N V E S T M E N T

2 . 2 % ( o f G D P )

C O N S U M E R

P R I C E I N D E X3 . 0

ECONOMIC OUT LOOK

5Source: IMF

Economic Indicators 2017

22%

14%

9%

8%

5%

42%

Pearl, Stones, Metals,.. (HS:71)Mineral Products (HS:25-27)

Vehicles, Aircrafts,.. (HS:86-89)

Machinery, Mechanical & Elec. Appliances (HS:84,85)

Textile (HS:50-63)

548041.853

511145.443

466295.683

411463.356

443733.89

657222.528

694344.323

630251.058

636367.936

640365.381

0 200000 400000 600000 800000 1000000 1200000 1400000

2013

2014

2015

2016

2017

USD MILLION

Exports Imports

ECONOMIC OUTLOOKTrade Profile Major Imports of UK

UK’s Trade with World Others

7

UNITED KINGDOM

PAKISTAN

Source: ITC Trade map

887.036 1054.929 962.25 934.511 868.94

1431.956

1654.645

1572.801 1557.63

1634.955

544.92599.716 610.551 623.119

766.015

0

200

400

600

800

1000

1200

1400

1600

1800

2013 2014 2015 2016 2017

USD

Mill

ion

Pakistan's Bilateral Trade With UK

Exports

Imports

BI LATERAL TRADE OVERV IEW

8

Pakistan exports to UK (Monthly Export Statistics)BI LATERAL TRADE OVERV IEW

9

120.00

125.00

130.00

135.00

140.00

145.00

150.00

155.00

160.00

165.00

170.00

January February March April May

USD

mill

ion

2017 2018

BED WARE KNITWEAR READYMADE

GARMENTSTOWELS

29%$426 m

25%$368

m19%

$280

m5.4%

$80m

77%Te x t i l e P r o d u c t s

H S c o d e ( 5 0 - 6 3 ) .

COTTON

FABRICS

4.7%

$70m

BI LATERAL TRADE OVERV IEW

10

Top five export commodity groups of Pakistan to UK

Source: PBS 2016-17

11

0 50 100 150 200 250

Bedlinen of textile materials

Men's or boys' ensembles of cotton

Bedlinen of cotton

Bedlinen, knitted or crocheted

Toilet linen and kitchen linen

Men's or boys' shirts of textile materials

Men's or boys' trousers of textile materials

Men's or boys' trousers of cotton

Jerseys, pullovers, cardigans, waistcoats and similar articles

Men's or boys' jackets and blazers of textile materials

Instruments and appliances used in medical

Men's or boys' shirts of cotton

Floorcloths, dishcloths, dusters and similar cleaning cloths

T-shirts, singlets and other vests of cotton, knitted or crocheted

Men's or boys' trousers of textile materials

USD million

2016

2017

Top 15 Exports (HS-6)BI LATERAL TRADE OVERV IEW

12

0 20 40 60 80 100 120 140 160 180 200

Turnings, shavings, chips, milling waste

Waste and scrap of iron or steel

Unwrought lead, refined

Worn clothing and clothing accessories, blankets and travelling

Data-processing machines

Artificial staple fibres

Generating sets with compression-ignition internal combustion piston…

Commodities not elsewhere specified

Medicaments consisting of mixed or unmixed products

Chemical products and preparations of the chemical

Printed books, brochures and similar printed matter

Hydraulic presses for working metal

Instruments and appliances used in medical

Waste and scrap of tinned iron or steel

AC motors, single-phase, of an output > 37,5 W

USD million

2016

2017

Top 15 Imports (HS-6)BI LATERAL TRADE OVERV IEW

POTENTIAL PRODUCTS

13

IDENTIFICATION OF POTENTIAL PRODUCTS

01

02 Imports of UK>10 million

Pak’s Exports >100 million

Pakistan’s share <10%03

S.No. HS – Code Product LevelPakistan’s Exports % Change

2016-17

Market Share

2016* 2017* 2016(%) 2017 (%)

1 '620462 Women's or girls' trousers, 75.047 59.952 -20.11 6.35 6.08

2 '610910 T-shirts, singlets knitted or crocheted 26.337 32.131 22.00 1.68 2.21

3 '901890 Instruments and appliances used in medical, 26.434 28.866 9.20 1.43 1.65

4 '610510 Men's or boys' shirts of cotton, knitted or

crocheted

35.065 26.52 -24.37 8.65 7.24

5 '420310 Articles of apparel, leather or composition

leather

18.677 16.871 -9.67 9.99 10.15

6 '611595 Full-length or knee-length stockings, socks and

other hosiery, incl. footwear

25.824 16.839 -34.79 6.63 5.21

7 '100630 Semi-milled or wholly milled rice, whether or

not polished or glazed

5.949 6.798 14.27 2.59 3.10

8 '611090 Jerseys, pullovers, cardigans, waistcoats and

similar articles

4.274 4.333 1.38 4.26 6.47

9 '081340 Dried peaches, pears, papaws "papayas",

tamarinds and other edible fruits

0.056 0.104 85.71 0.13 0.23

10 '611530 Women's full-length or knee-length hosiery 0.036 0.038 5.56 0.33 0.32

15

Product HS -Code :620462

Women’s or gir ls ’ trousers, bibs & brace

16

247.368

191.138

118.635

59.952 48.513 46.876 43.378 32.775 31.649

Bangladesh Turkey China Pakistan Cambodia Spain Germany Sri Lanka Egypt

Export Value (USD Million)

16,580

32,551

6,874

18,206 17,699

30,459

44,582

20,307

28,157

A V E R A G E U N I T P R I C E - 2 0 1 7E X P O R T F I G U R E S - 2 0 1 7

MARKET SHARE P A K E X P O R T S T O U K

-2.8% 8th

70%

CAGR

TARIFF NO. OF NON-

TARIFF

ECI rank

W o m e n ’ s o r g i r l s ’ t r o u s e r s , b i b s & b r a c e ( H S - 6 2 0 4 6 2 )

25%

19%

12%6%

5%

5%

5%

3%

20%

Bangladesh Turkey China

Pakistan Cambodia Spain

Germany Sri Lanka Rest of the world

0 20 40 60 80 100

2013

2014

2015

2016

2017

68.952

90.63

95.264

75.047

59.952

USD MILLION

17

❖ LOWER AVERAGE UNIT

PRICE

❖ EBA STATUS

❖ NO DUTY ON TEXTILE RAW

MATERIAL

❖ FDI

❖ PRODUCT

DIFFERENTIATION

❖ ‘TURQUALITY’ PROGRAM

❖ CENTRE OF EXCELLENCE

FOR TEXTILE

❖ PRICE LEADER

❖ LOW COST INPUTS

❖ ONLINE RETAILING

❖ TEXTILE REFORMS: HIGH-

TECH & GREEN PRODUCTS

Competitor’s

Analysis

BANGLADESH

China

TURKEY

18

P r o d u c t H S - C o d e : 6 1 0 9 1 0

T-shirts, s inglets and other vests of cotton, knitted or

crocheted19

362.53

198.831

123.33587.034 85.691 72.089 70.545

52.90632.131

Bangladesh Turkey India Netherlands China Germany Italy Belgium Pakistan


12,886

27,28618,266

39,453

8,88816,027

98,941

32,578

14,699

E X P O R T F I G U R E S A V E R A G E U N I T P R I C E


10.61% 15th

60%

CAGR

TARIFF NO. OF NON-

TARIFF

ECI rank

T - s h i r t s , s i n g l e t s a n d o t h e r v e s t s o f c o t t o n , k n i t t e d o r c r o c h e t e d (2017)

25%

14%

8%6%6%

5%

5%

2%

29%

Bangladesh Turkey India

Netherlands China Germany

Italy Pakistan Rest of the world

0 5 10 15 20 25 30 35 40

2013

2014

2015

2016

2017

19.409

36.211

31.818

26.337

32.131

USD MILLION

20


PRICE

❖ EBA STATUS


MATERIAL

❖ FDI

❖ PRODUCT

DIFFERENTIATION

❖ ‘TURQUALITY PROJECT’


FOR TEXTILE

❖ PRICE LEADER

❖ LOW COST INPUTS




❖ INVEST INDIA PROGRAM

❖ SCHEME FOR TEXTILE

INTEGRATED PARKS

❖ STANDARD GSP

❖ TECHNOLOGY

UPGRADATION FUND

SCHEME

Competitor’s

Analysis

BANGLADESH

CHINA

INDIA

TURKEY

21

P r o d u c t H S - C o d e : 9 0 1 8 9 0

Instruments and appliances used in medical , surgical etc

22

374.018

306.547

262.807231.254

97.029 86.46254.451

31.88 28.866

Belgium USA Netherlands Germany Japan China France Italy Pakistan

Export Value (USD Million) 87466

103577

64007

22438

48414

1913010041

22971 25689

E X P O R T F I G U R E S - 2 0 1 7 A V E R A G E U N I T P R I C E - 2 0 1 7


2.1% 14th

110%

CAGR

TARIFF NO. OF NON-

TARIFF

ECI rank

I n s t r u m e n t s a n d a p p l i a n c e s u s e d i n m e d i c a l , s u r g i c a l e t c ( 9 0 1 8 9 0 )

21%

18%

15%13%

6%

5%

3%2%

17%

Belgium USA Netherlands

Germany Japan China

France Pakistan Rest of the world

24.5 25 25.5 26 26.5 27 27.5 28 28.5 29

2013

2014

2015

2016

2017

26.029

28.82

28.439

26.434

28.866

USD MILLION

23

❖ PRODUCT

DIFFERENTIATION

❖ INNOVATIVE

TECHNOLOGY

❖ SKILLED LABOUR

❖ VALUE ADDITION

❖ AVAILABILITY OF STEEL

❖ LOW FAULT RATE (4%)

❖ LOW PRICE

❖ CHEAP LABOR

❖ HEALTHY CHINA 2030

Competitor’s

Analysis

USA

CHINA

GERMANY

24

P r o d u c t H S - C o d e : 6 1 0 5 1 0

Men’s or boy ’s shirts of cotton, knitted or crocheted

25

80.054

37.33 33.496 31.059 29.778 26.52 24.039 22.586 20.318

Bangladesh Italy China Germany India Pakistan Turkey France Netherlands


13,662

28,059

7,766

51,576

18,48214,617

34,668

70,587

50,948


MARKET SHARE P a k e x p o r t s t o U K

-12.5% 9th

60%

CAGR

TARIFF NO. OF NON-

TARIFF

ECI rank

M e n ’ s o r b o y ’ s s h i r t s o f c o t t o n , k n i t t e d o r c r o c h e t e d

22%

10%

9%

9%8%

7%

7%

6%

22%

Bangladesh Italy China

Germany India Pakistan

Turkey France Rest of the world

0 10 20 30 40 50 60 70

2013

2014

2015

2016

2017

51.792

63.985

59.37

35.065

26.52

USD MILLION

26


PRICE

❖ EBA STATUS


MATERIAL

❖ FDI

❖ PRODUCT

DIFFERENTIATION

❖ ‘TURQUALITY PROJECT’


FOR TEXTILE

❖ PRICE LEADER

❖ LOW COST INPUTS




❖ INVEST INDIA PROGRAM

❖ SCHEME FOR TEXTILE

INTEGRATED PARKS

❖ STANDARD GSP

❖ TECHNOLOGY INNOVATION

FUND SCHEME

Competitor’s

Analysis

BANGLADESH

CHINA

INDIA

TURKEY

27

P r o d u c t H S - C o d e : 4 2 0 3 1 0

Articles of apparel, of leather or composition leather

28

34.97432.653

25.534

16.87114.635

7.989 6.497 5.811 4.424

Italy India France Pakistan Germany Spain Turkey China Netherlands


49,293 59,357

100,566

27,186

103,842

56,702

146,587

35,723

132,688


MARKET SHARE (HS-420310) P A K E X P O R T S T O U K

-8.1% 5th

40%

CAGR

TARIFF NO. OF NON-

TARIFF

ECI rank

0 5 10 15 20 25 30

2013

2014

2015

2016

2017

25.813

24.521

21.081

18.677

16.871

USD MILLION20%

19%

15%10%

8%

5%

4%

3%

16%

Italy India France

Pakistan Germany Spain

Turkey China Rest of the world

ARTICLES OF APPAREL, OF LEATHER OR COMPOSITION LEATHER (HS-420310)

29

❖ TURKISH LEATHER

BRAND(TLB) PROJECT

❖ INDUSTRIAL LEATHER

ZONES(13)

❖ HIGH QUALITY, MODERN

PRODUCTION PROCESS

❖ LOW PRICE

❖ DUTY DRAW BACK (8.5%)

❖ LABOUR-INTENSIVE

INDUSTRY

❖ ABUNDANT NATURAL

RESOURCES

❖ SKILLED LABOUR

❖ ABUNDANT NATURAL

RESOURCES

❖ CENTRAL LEATHER

RESEARCH INSTITUTE

❖ SPECIAL ECONOMIC ZONE

❖ DUTY DRAWBACK (9.5%)

Competitor’s

Analysis

TURKEY

India

China

30

S W

TO

S T R E N G T H S

O P P O R T U N I T Y T H R E AT

W E A K N E S S

SWOT ANALYSIS

31

STRENGTHS

01 GSP+ status

02 Revised vulnerabi l i ty

cr i ter ia

03 Product : T-shir ts (610910) ,

Instruments (901890)

04 Devalued PKR

32

01 Cost of doing business

02 Narrow Export base

03 Duties and Taxes

04 Macroeconomy

WEAKNESS

33

OPPORTUNITY

01 Product Differentiation (branding, value addition)

02 Large market

03 Negotiate Agriculture products

34

01 BREXIT

02 Declining share

03 Evolving preferences

04 Global competitiveness

THREAT

35

0 1

0 2

0 3

AGREEMENT

• Sign Free Trade Agreement• Aggressive negotiation

DIVERSIFICATION OF EXPORT BASKET

• Minerals, Pharmaceuticals, PET • Leather (HS-42), Cereals

PRODUCT OF MONOLPOLY

• ‘Bedlinen of Cotton (630231)’ • Increase: 8.5%, Share: 50%

RECOMMENDAT IONS

36

0 4

0 5

0 6

TEXTILE PRODUCTS

SURGICAL ITEMS• Recommended product: Instrument & Appliances (901890)• Training• Trade promotion activities

LEATHER PRODUCTS

• Article of apparel (420310)• Duties on raw material

RECOMMENDAT IONS

• ‘Women’s or girl’s trousers (620462)’, ‘T-shirts, singlets etc (610910)’, ‘Men’s or boy’s shirts etc (610510)’

37

38

THANK YOU!

39

2013 2014 2015 2016 2017

Population Growth rate (%) 0.63 0.77 0.80 0.60 0.70

GDP Per Capita (USD p.a) 42452.95 46478.84 43976.42 40049.78 38846.79

GDP Growth 1.9 3.1 2.2 1.8 1.7

Unemployment rate (%) 7.6 6.2 5.4 4.9 4.4

Consumer Price Index (Annual %) 2.6 1.5 0 0.7 2.6

Average Exchange Rate 0.6072 0.6407 0.6748 0.8129 0.7401

FDI net (% of GDP) -0.4 -5.8 -4.0 -8.2 2.2

Key Economic Indicators for the UK

40

Trade (USD million) 2013 2014 2015 2016 2017

Pakistan’s Exports to the UK* 1431.95 1654.64 1572.80 1557.63 1634.95

Pakistan’s Imports from the UK* 544.92 599.72 610.55 623.12 766.02

Pakistan’s Trade Balance* 887.036 1054.929 962.25 934.511 868.94

Pak’s share in the UK’s Import (%) 0.22 0.24 0.25 0.24 0.26

Change in Pakistan’s Exports to the UK (%) -- 15.55 -4.95 -0.96 4.96

Ranking of Pakistan as an exporter 52 48 45 43 46

Total Trade Volume* 1976.876 2254.361 2183.352 2180.749 2400.97

Bilateral trade figures *Figures are in USD Million

41

Monthly Comparison of Trade Statistics % Change YoY

Jan-17 *

(R)

Feb-17*

(R)

Mar-17

* (R)

Jan-18 *

(R)

Feb-18 *

(R)

Mar-18

* (P)

Jan 17-

18

Feb 17-

18

Mar 17-

18

Exports 132.671 127.911 150.417 150.232 150.077 164.133 13.237 17.330 9.119

Imports 63.467 49.542 85.353 67.170 79.378 56.163 5.833 60.225 -34.200

Trade

Balance69.203 78.369 65.064 83.062 70.699 107.971 20.026 -9.787 65.946

Recent trade figures of Pakistan with UK *Figures are in USD Million

42

Ranks Based on

Export valuesCountries

Value of Exports in 2017* CAGR (%) 2013-17Rank Based on ECI

Average Unit Price

(USD

thousand/Ton)

TariffNumber of Non-

tariff barriers2013 2017

1 Bangladesh 247.368 3.760 1 1 16,580 0 7

2 Turkey 191.138 2.732 6 2 32,551 0 7

3 China 118.635 -14.505 4 5 6,874 12 7

4 Pakistan 59.952 -2.759 13 8 18,206 0 7

5 Cambodia 48.513 -7.496 15 13 17,699 0 7

6 Spain 46.876 5.945 2 3 30,459 0 7

7 Germany 43.378 10.709 8 7 44,582 0 7

8 Sri Lanka 32.775 -9.364 10 4 20,307 9.6 7

9 Egypt 31.649 -12.368 12 12 28,157 0 7

10 Netherlands 27.36 -4.508 3 11 45,373 0 7

11 Italy 20.837 -9.244 5 6 52,886 0 7

12 India 19.183 -13.087 11 15 22,203 9.6 7

13 USA 14.094 -2.491 14 9 93,338 12 7

14 France 13.415 -4.680 7 10 60,977 0 7

15 Viet Nam 9.976 -0.170 9 14 17,975 9.6 7

HS- 620462 *Figures are in USD Million

43

Ranks Based on

the Export value in

2017

Countries Value of Exports

in 2017

CAGR (%) 2013-17

Rank Based on ECI

Average Unit Price

(USD thousand/ton)Tariff

Number of

Non-tariff

barriers2013 2017

1 Bangladesh 362.53 -3.22 2 1 12,886 0 6

2 Turkey 198.831 -7.38 3 3 27,286 0 6

3 India 123.335 -6.80 4 6 18,266 9.6 6

4 Netherlands 87.034 9.00 7 4 39,453 0 6

5 China 85.691 -9.01 5 10 8,888 12 6

6 Germany 72.089 15.37 13 9 16,027 0 6

7 Italy 70.545 8.45 11 8 98,941 0 6

8 Belgium 52.906 9.46 10 5 32,578 0 6

9 France 46.774 2.41 12 12 54,835 0 6

10 Sri Lanka 38.487 -11.48 6 11 20,703 9.6 6

11 Portugal 35.305 -3.56 8 7 20,502 0 6

12 Pakistan 32.131 10.61 14 15 14,699 0 6

13 Spain 25.869 15.02 15 14 27,638 0 6

14 Cambodia 25.614 -10.26 9 13 18,561 0 6

15 Mauritius 20.294 -16.65 1 2 30,656 0 6


44

Ranks Based on

Export valuesCountries Value of Exports

in 2017

CAGR (%) 2013-17

Rank Based on ECI Average Unit

Price (USD

thousand/ton)

Tariff

Number of

Non-tariff

barriers2013 2017

1 Belgium 374.018 4.91 1 1 87466 0 11

2 USA 306.547 -3.50 3 3 103577 0 11

3 Netherlands 262.807 1.76 2 2 64007 0 11

4 Germany 231.254 -3.15 4 4 22438 0 11

5 Japan 97.029 -2.89 8 5 484141 0 11

6 China 86.462 -1.60 10 8 19130 0 11

7 France 54.451 -13.87 5 10 10041 0 11

8 Italy 31.88 -2.15 13 12 22971 0 11

9 Ireland 29.645 -2.98 6 6 23994 0 11

10 Pakistan 28.866 2.09 14 14 25689 0 11

11 Switzerland 27.221 5.35 11 11 155062 0 11

12 Finland 26.731 -5.84 7 9 296031 0 11

13 Lithuania 21.24 1.01 9 7 10608 0 11

14 Israel 14.647 -6.44 12 13 17287 0 11

15 Poland 14.362 -4.44 15 15 276818 0 11


45

Ranks Based

on Export

values

Countries Value of Exports

in 2017

CAGR (%) 2013-

17

Rank Based on ECI

Average Unit Price

(USD thousand/ton)Tariff

Number of Non-

tariff barriers2013 2017

1 Bangladesh 80.054 -1.17 1 1 13,662 0 6

2 Italy 37.33 -3.40 4 3 28,059 0 6

3 China 33.496 -9.13 8 10 7,766 0 6

4 Germany 31.059 7.84 11 4 51,576 0 6

5 India 29.778 -7.43 9 12 18,482 12 6

6 Pakistan 26.52 -12.53 6 9 14,617 0 6

7 Turkey 24.039 0.87 10 7 34,668 0 6

8 France 22.586 5.38 12 6 70,587 0 6

9 Netherlands 20.318 -1.30 2 2 50,948 0 6

10 Spain 7.612 -1.91 13 14 30,078 0 6

11 Portugal 6.926 -6.23 5 5 47,152 0 6

12 Belgium 5.805 -8.04 7 8 24,507 9.6 6

13 Viet Nam 4.974 -0.77 14 15 29,530 0 6

14 Tunisia 4.837 61.01 15 11 26,634 0 6

15 Cambodia 4.801 -23.69 3 13 17,567 0 6


46

Ranks Based on

Export valuesCountries Value of Exports in

2017

CAGR (%) 2013-17

Rank Based on ECI Average Unit

Price

(USD

thousand/Ton)

Tariff

Number of

Non-tariff

barriers2013 2017

1 Italy 34.974 -8.77 1 1 49293 0 4

2 India 32.653 -2.92 3 4 59357 0 4

3 France 25.534 2.31 5 3 100566 0 4

4 Pakistan 16.871 -8.15 4 5 27186 0 4

5 Germany 14.635 10.78 8 6 103842 0 4

6 Spain 7.989 3.30 9 7 56702 0 4

7 Turkey 6.497 -13.40 7 9 146587 0 4

8 China 5.811 -19.75 6 11 35723 4 4

9 Netherlands 4.424 -2.32 10 8 132688 0 4

10 Viet Nam 2.612 63.58 14 13 85267 0 4

11 Mauritius 1.933 -23.73 2 2 100692 0 4

12 Belgium 1.901 -5.56 12 12 69667 0 4

13 USA 1.689 -0.89 13 15 93538 4 4

14 Denmark 1.667 -2.00 11 10 78391 0 4

15 Poland 1.641 68.73 15 14 116300 0 4


47

INDICESTotal

CountriesPakistan India China Bangladesh Nepal Sri Lanka Bhutan

Global

Competitiveness

Index137 115 40 27 99 88 85 82

Ease of Doing

Business Index190 147 100 78 177 105 111 75

Economic Freedom

Index180 131 130 110 128 133 111 87

Labor cost

(US /month)

Electricity cost

(US cents/KwH)

Gas Cost

(US$ /MMBTU)

Pakistan 143 14 5.72

Bangladesh 65 11 2.52

India 81 8 2.80

GLOBAL RANKING COMPARISON

TARIFF COMPARISON

the pakistan-uk bilateral trade analysis · exchange rates against us dollar (end of month) 0.40...

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