Brexit can restructure trade between Pakistan and the UK, say experts. It can have an adverse impact on value-added exports, particularly in textile industry. Even though Pakistan typically exports low value-added products, a significant proportion of imports into the UK from Pakistan is likely to involve value addition in Pakistan. The UK and the EU are a major market for value-added consumer goods exported from Pakistan.
With more than 20 per cent of total exports from Pakistan to the EU destined for the UK, a harder Brexit process that involves renegotiation of trade agreements will have significant consequences for Pakistani exporters. With the most important export destination of Pakistan – UK-- opting to leave the EU, it is imperative that Pakistani policymakers seek trade policies that alleviate any negative impact, particularly if hard measures are to be adopted by the UK.
Imports from Pakistan into the UK are heavily concentrated in textile products, which contribute 82 per cent of total imports. Vegetable products account for four per cent and leather products account for three per cent. Nine out of the top 10 products imported into the UK from Pakistan, which account for more than 50 per cent of all imports into the UK from Pakistan, were made-up of textile articles.