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Being a non member, TPP may hurt Pakistan

The basic mechanics of the TPP are fairly simple — removal of tariffs, expedited customs clearance and reduced restrictions on transnational banking.

Of the 12 participating nations, only the US houses a major consumer market. So while exports are expected to rise for all, the most benefit is likely to be realised by countries that have become manufacturing hubs for high-end consumer goods, like Vietnam, Mexico and to a lesser extent Malaysia.

The sheer scale of economic activity likely to be affected is massive; the bloc would constitute no less than 40 per cent of global GDP and projected commercial benefits far exceed every comparable free trade agreement in the region. For member nations a harmonised trade regime will attract increasing trade flows into its own orbit.

But how much a non-member like Pakistan would gain is doubtful. With duty free access to American retailers guaranteed, garment manufacturers within the trading bloc are expected to turn away from traditional export leaders like Pakistan and towards American textiles.

Alternatively, textile manufacturers may consider reorienting towards countries not in the TPP fold. Obvious destinations include China and South Korea. And yet Pakistan’s exports to both have shown a downward trend in recent years. Over the last two years, India has overtaken Pakistan as the leading exporter of yarn to China. So it will be difficult for Pakistani textiles to remain viable if the TPP comes into force.

 
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