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Audit of Trade Facilitation Measures for Enhancing Pakistan Light Engineering and Made up Articles Exports to ECO Countries

By

Dr. Adil Khan Miankhel

Draft Report

November 2011

The author is Director at Pakistan Institute of Trade and Development (PITAD), Ministry of Commerce, Government of Pakistan. Please send your comments at [email protected]

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mailto:[email protected]

Pakistan’s exports have traditionally been concentrated in a few export destinations like USA, UK, Germany, Hong Kong, UAE and Afghanistan. Similarly Pakistan’s imports are also concentrated in few markets and imports mainly originate from UAE, Saudi Arabia, Kuwait, Malaysia, Japan, Germany, USA and UK. The details about direction of exports and imports indicate that except for Afghanistan, no other member country of Economic Cooperation Organization (ECO) is an important and major trading destination from Pakistan’s perspective (Economic Survey 2010-11). ECO is a ten member states organization comprising Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyz Republic, Pakistan, Tajikistan, Turkey, Turkmenistan and Uzbekistan. ECO exports during 2008 stood at US$276.0 billion while Imports amounted to US$ 306.8 billion. The intra industry trade in the region valued US$ 41.42 billion in 2008 (ECO Annual Report 2008). Pakistan being member of ECO needs to avail this opportunity and realize its full trade potential with other ECO member states.

Pakistan’s exports registered a growth rate of 29 percent during June-July 2010-11 compared to the same period of last year and as a result Pakistan’s exports crossed the US$ 25 billion mark for the first time (TDAP 2011). The major contributor to the export growth during the first ten months of current fiscal year compared to same period of last year was textile sector, constituting 55.3 percent of the total exports. Textile manufactures increased its exports by approximately US$2.7 billion. Similarly made up articles during the same period constituted 2.8 percent of total exports and registered an increase of approximately 30 percent amounting to US$ 132.8 million. In addition, engineering goods also increased by US$ 51.5 million during the same period. The engineering goods exports constituted 1.2 percent of the total exports June-July 2010-11 (Economic Survey 2010-11).

Economic Structure and Trade Links of ECO Countries

ECO countries are relatively open economies especially the Central Asian Republics (CARS). Except for Turkey, Iran and Afghanistan with which Pakistan has established trade routes and trade facilitation infrastructure, Pakistan’s trade intensity is less than 1 for the rest of ECO countries (Table 2). This indicates that trading relations are not intense with Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan despite these being relatively open economies than Turkey, Iran and Afghanistan. However, this does not mean that CARs are not trading substantially with other countries or having low domestic demand for the imported products. The number of tariff lines at a 3 digit SITC level where import value for each tariff is higher than 100.000 dollars or represents more than 0.3 percent of total national imports in CARs is comparable with number of tariff lines in Afghanistan, Turkey and Iran. In addition, the concentration index also indicates that demand for imported products in CARs is fairly spread across imported products. However, the structure of

Table 1 Exports Structure US $ MillionProduct July-April Percentage

(%) change AbsoluteChange

PercentageShare of Total Exports

2010-11 2009-10

Textile Manufactures

11,148.6 8,442.7 32.1 2,705.9 55.3

Made up Articles

570.1 437.3 30.4 132.8 2.8

Engineering Goods

239.9 188.4 27.3 51.5 1.2

Total 20,154.2 15,773.2 27.8 4381.1 100Source: Pakistan Economic survey 2010-11

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imports by products in ECO countries differs considerably from average import structure of products in the world and this absolute deviation of the country share from the world structure for different products is more pronounced in CARs (Table 2).

Table 2 Economic Structure of ECO Countries 2010 Indicator Afghanistan Azerbaijan Iran Kazakhstan Kyrgyzstan Tajikistan Turkey Turkmenistan UzbekistanGDP ($ bn)

NA 51.09 NA 142.9 46.16 56.40 735 21.07 38.98

Trade Openness (Avg2007-2009)

NA 88.1 57.9 87.1 140 112 49.9 NA 70.6

Trade Intensity with Pakistan

0.43 161 2.55 0.149 0.26 0.175 2.35 0.24 0.26

Absolute Value Imports (Tariff Lines at SITC 3 digit Level

256 253 252 256 249 213 257 253 249

1Concentration Index Imports

0.13 0.07 0.06 0.06 0.19 0.14 0.08 0.07 0.07

2Diversification index Imports

0.51 0.47 0.4 0.36 0.48 0.55 0.29 0.45 0.43

Source: World Bank, UNCTAD, ITC Trade Map, WTO

The complementarity index3

that measures the overlap and the degree to which the export pattern of a country (Pakistan) matches the import pattern of a country also indicates that this index despite being low with CARs at the start is rising over time demonstrating favourable prospects for trade integration (Figure 1). However, the performance of this index is different in Turkey, Iran and Afghanistan. In Turkey and Iran, it is fairly stagnant over time while with Afghanistan; it is rising sharply during the past three years highlighting prospects for further trade integration. ECO countries, in general, provide good opportunities for Pakistan export growth as these are open economies with the demand for imported products are fairly spread.

Light Engineering Products Exports to ECO Countries

1 see Appendix: Definitions2 see Appendix: Definitions3 see Appendix: Definitions

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Light Engineering as defined by the Pakistan Engineering Development Board includes 44 codes (products) at the HS 6 digit level. The detail of these codes (products) along with Pakistan’s total exports of these items to ECO countries and the World is given in Table A 1 (Appendix). Pakistan’s total exports to world in 2010 in this category amounted to US$ 94.9 million that constituted only 0.44 percent of Pakistan total exports. Pakistan’s total exports of light engineering products to ECO countries stood at US$ 49.81 million that account for 52 percent of Pakistan’s exports in this category. In addition, Pakistan exports to ECO countries in only 18 codes (products) out of 44 codes.

As far as direction of exports of light engineering products in the ECO region is concerned, Afghanistan accounted for 99.3 percent of Pakistan’s total exports to ECO region (Table 3). Afghanistan was also the largest market for Pakistani light engineering products in 2010 accounting for 52 percent of Pakistan’s world exports (Figure 3).The large quantum of exports to Afghanistan can be explained in terms of proximity between the two countries and established trade routes and trade facilitation infrastructure with Afghanistan. Afghanistan is a landlocked country and most of the trade for Afghanistan is conducted through Pakistan via transit trade. In addition, most of supplies for the Allied forces in Afghanistan are also routed through Pakistan. Pakistan government has also allowed trade transactions with Afghanistan in local currency (Ministry of Commerce 2009). Given the flexibility of trade in local currency and demand effect due to non-existent or infant industry and reconstruction activities being undertaken by international developmental agencies, Afghanistan has become an important export destination for Pakistan. This can also be observed in the export of light engineering products.

Pakistan export of light engineering products to other ECO countries is insignificant. Even with the countries with which Pakistan has established trade routes and trade facilitation infrastructure such as Turkey and Iran, Pakistan export of light engineering products is negligible. In Iran and Turkey, China and Germany are major suppliers of this group. In Afghanistan, Russia and the US are bigger suppliers of this group than Pakistan while in CARs, Russia and China are the major suppliers of this group. CARs imported light engineering items to the tune of US$1.56 billion in 2010; however, their imports from Pakistan were only US$13,000. CARs are importing pumps from China, Germany and Russia. Fans from the Italy, the US and Russia and motors from Russia and China.

Table 3 Pakistan Light Engineering Exports (US $ Mn)

2008 2009 2010Afghanistan 22.764 32.988 49.55Turkey 0.096 0.191 0.215Iran 0.639 0.014 0.02Turkmenistan 0 0 0.013Azerbaijan 0.002 0.001 0.001Uzbekistan 0.003 0.013 0Kazakhstan 0 0 0Tajikistan 0 0 0Kyrgyzstan 0 0 0ECO 23.504 33.207 49.81Source: Trade Map

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Different reasons can be attributed for low Pakistan exports of light engineering products to ECO countries such as ‘behind and beyond the border factors’ and supply side constraints. It is hypothesized that beyond the border factors are less likely to affect export of such items as Pakistan is already exporting 52 percent of its exports to Afghanistan only. So it could be ‘behind the border factors’ that may be hindering the export of such products to other ECO countries. However, if it is ‘ beyond the border constraints’ hampering Pakistan exports, any improvement in it is likely to improve the export performance of all the players in the export markets. So Pakistan needs to focus on ‘behind the border constraints’ in first place as initiating reforms will be easy. In Turkey and Afghanistan, tariff structure on light engineering products provides level playing field to Pakistan and

its competitors in this group. In CARs, Pakistan and China receive no preferential tariffs in this group but Russia has duty free access. With Iran, Pakistan shares a common border and receives preferential access under Pak Iran Preferential Trading Arrangement (PTA) and despite this, its exports are negligible pointing to either supply side constraints or ‘behind the border constraints’ and whereby our production is either consumed locally or could not compete with China (Tables

A2-A5 Appendix).

As far as competitiveness of Pakistan exports of light engineering products group is concerned, it is weak as this group Revealed Comparative Advantage (RCA) is less than 1. However, the competitiveness of this group is improving over time (Figure 5). Therefore, Pakistan needs to focus on improving ‘behind the border’ factors and increase supply base to capture bigger share of light engineering product market in the ECO region. By catering to bigger market, Pakistani exporters can reap the benefits of increasing returns to scale by focussing on economies of scale. This would help the exporters to not only specialise in certain varieties of this product group but also would

stimulate investment for developing new products. Specialisation would lead to intra-industry trade and would integrate the region through trade links.

Made up Articles Exports to ECO Countries

Pakistan mainly exports made up products to the US and EU. Pakistan exported in 2010 made up articles to the world amounting to approximately US$ 3.28 billion. Exports to ECO countries are, however, negligible that

constitutes 0.3 percent of Pakistan global export of made up articles. Among ECO countries, Turkey is a traditional export market for made up articles while Afghanistan and Iran are emerging markets. Exports of made up articles to CARs is low (Table 4). A disaggregated analysis for the four markets of

Table 4 Pakistan Exports of Made up Articles US$Mn2008 2009 2010

Afghanistan 1.947 4.878 2.974

Turkey 6.069 3.925 4.143

Iran 0.725 1.003 1.825

Turkmenistan 0 0 0

Azerbaijan 1.007 0.684 0.204

Uzbekistan 0.117 0.052 0.39

Kazakhstan 0.005 0.073 0.055

Tajikistan 0.017 0.189 0.076

Kyrgyzstan 0.023 0.036 0.492

ECO 9.91 10.84 10.159

Source: Trade Map

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CARS, Iran, Turkey and Afghanistan is also presented in the Appendix (Table B1-B5 Appendix). In the CARs, for example, Pakistan is exporting bed sheets and dish cloth. CARs are importing most of the made up products from China and Turkey. Towels which are important items in the Pakistan export basket were exported in small quantities in 2010 to CARS. It is important to mention that both Turkey and China have not been given any special tariff preferences in CARS markets. This raises the question

that even though Pakistan is competitive in the made up articles and both Turkey and China does not have any preferential advantage or any geographical advantage, then why our exports for made up items to CARs are negligible (Figure 6).The competitiveness of Pakistan made up articles is very high and it demonstrates the strength of these products in the export basket of Pakistan. Despite this, the share of made up articles to ECO countries is very low. One of the reasons could be that there exist ‘behind the border’ obstacles that are hindering the export growth to these countries. The analysis

for Iran also point towards the existence of ‘behind the border’ factors as the major reason for low exports of made up articles in Iranian market. However, as far as Afghanistan is concerned, Pakistan is a major supplier of these items due to close proximity with Afghanistan and established land routes for trade and

we are also a major supplier in Turkish market. As far tariffs on made up articles in the ECO countries are concerned, our products are not placed at a disadvantageous position with respect to other exporting countries.

Pakistan Export Potential of Light Engineering and Made up Articles in the ECO Region

Export potential is defined as the level of exports that could be achieved with open and frictionless trade possible between countries. It is also called the maximum level of exports for a given level of determinants of exports. Frictionless trade is possible between countries when there are no institutional and infrastructural rigidities in home and trading partner countries. The rigidities that exist within home country are named as ’behind the border’ factors, while the rigidities that exist in trading partner countries are named as ’beyond the border’ factors.

Earlier studies have noted the difference between observed exports and the predicted value as

potential exports. Generally, studies have used the OLS estimation of gravity equation to find trade

potential (For example, Baldwin 1994; Nilsson 2000) between a pair of countries. The OLS

estimation procedure produces estimates that represent the centered values of the data set. But,

potential trade refers to free trade with no restrictions to trade. Thus, for policy purposes, it is rational

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to define potential trade as the maximum possible trade that can occur between any two countries,

which have liberalized trade restrictions the most, given the determinants of trade. This means that the

estimation of potential trade requires a procedure that represents the upper limits of the data and not

the centered values of the data set (Kalirajan 2007).

The realized actual trade is measured by the current level of determinants of trade with existing level

of restriction and institutions. Thus, there may exist a gap between potential and actual trade, which is

directly related to various socio-political and institutional factors that are hindering the actual trade to

grow to its potential level. By knowing the trade potential, countries could engage in bilateral and

multilateral processes to make efforts to minimize or at least mitigate the effect of existing restrictive

measures to trade growth. Therefore, the objective of any country is to achieve its full trade potential

through reducing or eliminating institutional and infrastructure rigidities through trade policy reforms

and also by taking part in bilateral and multilateral trade negotiations.

Therefore, it is of significant importance that each country may know its full trade potential with other

countries or other regions in order to get the reforms and negotiations process started. However,

countries are diverse not only in their level of development but also in terms of endowment, openness,

strategies, level and pattern of engagement with the rest of the world. Therefore, any country’s

inability to export to its potential is a reflection first of ‘behind the border’ factors that exist within the

exporting country, and secondly of ’beyond the border’ factors that exist within the partner countries.

In this study, Stochastic Frontier Gravity model will be applied to determine Pakistan’s trade

potential in textile made ups and light engineering products with ECO countries. This will enable us

to examine how effective are the ‘behind the border measures’ as major trade constraints. The

suggested approach provides potential trade estimates that are closer to frictionless trade estimates

(Drysdale, et al 1997 and Armstrong, et al 2008). Because, this approach represents the upper limits

of data, which come from those economies that have liberalized their trade restriction the most.

Finally, the suggested method bears strong theoretical and trade policy implications towards finding

ways of improving the performance of the ‘behind the border measures’. The gravity equation for

exports can be estimated as for example,

,

where the term represents the actual exports from country i to country j. The term is a

function of the determinants of potential bilateral trade ( ), which include distance, GDP and

population to represent supply and demand conditions, and is a vector of unknown parameters.

The single sided error term, is the economic distance bias referred to by Anderson (1979), which is

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due to the influence of the ‘behind the border measures’. takes a values between 0 and 1 and it

is usually assumed to follow a truncated (at 0) normal distribution, . The double-sided error

term is usually assumed to be . It captures the influence of omitted variables on trade

flows including ‘beyond the border’ factors that are present in the importing countries in addition to

measurement errors that are randomly distributed across observations in the sample.

The stochastic frontier gravity model is estimated at HS 2 digit level. The sample consisted of ECO

countries for the period 2008-2010. The Gross Domestic Product (GDP), bilateral export data,

population data, tariffs as well as GDP deflators’ for analysis were obtained using World Integrated

Trade Solutions (WITS) from the UNCOMTRADE database and TRAINS. The bilateral trade weighted

distances have been downloaded from (www.cepii.fr/francgraph/bdd/distances.pdf). The model

estimation for light engineering products and made up articles are presented in Table 5 that indicate

that sigma-squared ( ), which is a measure of total variation in the model is significant in all

estimations. This variation in potential exports can be due to just random factors ( ) or to country

specific socio-political and institutional factors ( ) between Pakistan and its ECO trading partners.

The nature of variation in the model can be obtained by examining the gamma coefficient. We

estimate gamma ‘ ’, which is . The value of close to 0 reflects that the bias or country-specific

‘behind the border measures’ are not important. If takes a value other than 0, it implies that

country specific ‘behind the border measures’ are important. Behind the border obstacles incur

additional transaction costs on the smooth flow of goods such as institutional costs due to attitude

of institutions, regulatory and legislative costs, equipment and training costs and political costs due

to inability of the governments to take trade facilitation measures due to geo-strategic reasons.

Behind the border measures could range from product standards and conformity assessment

measures, business facilitations, trade finance to hard (physical) and soft (regulatory) infrastructure

such as efficient transport links and networks, logistics in form of efficient freight forwarders,

distributors and efficiency of telecommunication system.

The results of the estimated model are shown in Table 5. All the variables have expected signs for

light engineering product group. However, value is 0 implying that there are no ‘ behind the

border measures’ constraining Pakistan export of light engineering products to ECO countries.

Empirical model for made up articles also show similar results except the negative sign for GDP

which, however, is insignificant. The value of for Pakistan export to ECO countries for the two

product groups may seem to be surprising. The reason why the value of is 0 because Afghanistan

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http://www.cepii.fr/francgraph/bdd/distances.pdf

being member of ECO is included in the estimation model which is not only Pakistan neighbouring

country but also account for 52 percent of Pakistan global export of light engineering products. As

trade with Afghanistan is well established, therefore, we could expect value of too be 0. The

other major export destinations for this product group are Iran and Turkey. So the empirical results

correctly portray the export pattern of light engineering products to ECO countries (Table 6).

Same is the case with the estimation results of made up articles. Here too, the value of

is 0 and Turkey, Afghanistan and Iran are the biggest markets in the ECO region (Table 5 & Table 6).

On the other hand, if we estimate the model without including Afghanistan in the ECO region, some of variables in the estimated model results depict different signs than expected and are significant. In addition, the

value of is also very close to 1 showing existence of ‘ behind the border’ obstacles

in the export of of light engineering and made up articles to the ECO region except Afghanistan (Table 5). Pakistan has trade potential for these product groups in the ECO region as shown table C1 (Appendix). However, inorder to realize this trade potential, pakistan needs to remove’ behind the border’ obstacles and improve

institutional rigidities and infrastructure for the export of products to the ECO region.

Trade Facilitation

Table 5 Estimation results of the Trade Gravity Stochastic Frontier Model

ModelDependantVariableExports

Light Engineering Made ups Light Engineering without Afghanistan

Madeups without Afghanistan

Constant 10.11*** 1.99* -0.1*** -1.16***

GDP 0.056

-0.02 -0.01*** -0.07***

Population 0.024 0.02*** 0.002*** 0.02***

Tariff -6.52 -2.16*** 0.13*** -1.4***

Distance -1.5*** -0.22 0.02*** 0.29***

0.59 0.18*** 0 0

0.01** 0.003 0.01*** 0.04**

0.35 0.71 0.0001* 0.002*

0

0 0.99*** 0.99***

Log likelihood -8.04 2.73 29.56 19.67Note: *, ** and *** represent significance levels at 10 percent, 5 percent and 0 percent, respectively.

Table 6 Estimation Data for the Model (2008-10)

Light engineering

LnExports LnGDP Ln Dist Tariff Pop(Mn)

Afghanistan 3.20 9.19 6.69 0.042 30.60

Turkey 0.12 13.19 8.22 0 71.84

Iran 0.13 12.31 7.58 0.15 73.13

CARs 0.0067 11.86 7.44 0.038 69.06

Made ups

Afghanistan 1.36 9.19 6.69 0.096 30.60

Turkey 1.098 13.19 8.22 0.073 71.84

Iran 0.569 12.31 7.58 0.68 73.13

CARs 0.507 11.86 7.44 0.2 69.06

Source: Author’s Calculations

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The World Trade Organisation (WTO) defines trade facilitation as ‘The simplification and harmonisation of international trade procedures’ where trade procedures are the ‘activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in international trade’ (Granger 2007). The United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) further broadens the definition of trade facilitation as ‘the simplification, standardization and harmonization of procedures and associated information flows required to move goods from seller to buyer and to make payment’ . In the UN/CEFACT definition, the role of commercial procedures, banks and other financial institutions has been acknowledged in international trade operations. Occasionally, ‘trade facilitation’ is also used literally to mean the improvement of transport infrastructure (that is, transport facilitation), removal of government corruption, reduction of customs tariffs, removal of inverted tariffs, resolution of non-tariff trade barriers, export marketing and export promotion (Granger 2007).

All definitions of trade facilitation aim to improve the trading environment and reduce transaction costs incurred as a result of interaction between business and government. UN/CEFACT, in its Recommendation No. 4 (1974) states that the trade facilitation program ought to be guided by the ‘…simplification, harmonization and standardization [of trade procedures] so that transactions become easier, quicker and more economical than before…’. Simplification is ‘…the process of eliminating all unnecessary elements and duplications in formalities, process and procedures…; harmonization is the alignment of national formalities, procedures, operations and documents with international conventions, standards and practices; [and] standardization is…the process of developing internationally agreed formats for practices and procedures, documents and information’. As such, trade facilitation is at once a political, economic, business, administrative, technical and technological issue (Butterly 2003). The OECD estimated that each 1 percent saving in trade related transaction costs yields a worldwide benefit of US$43 billion (OECD 2003). It has also been recognised by the donor community and between 2002 and 2005, donors committed on average US$21 billion per year on more narrowly defined aid for trade projects (OECD & WTO 2007).

Many bilateral and regional trade agreements consider trade facilitation as meaning any procedure, process or policy capable of reducing transaction costs and facilitating the flow of goods in international trade. Trade facilitation in this wider sense can influence a wide range of activities such as import or export procedures, transportation formalities, logistics services, payment, insurance and other financial requirements. However, trade facilitation even in its wider sense is generally distinguished from tariff negotiations and the development of physical infrastructure for trade (such as ports, roads, railways) that also influence the flow of traded goods (ARTNeT 2006). In addition, The UN/CEFACT and UNCTAD (2002) compendium to international trade facilitation recommendation covers the following areas:

Trade procedures

Customs and regulatory bodies

Provisions for official control procedures applicable to import, export and transit including: general arrangement customs controls, official documentation, health and safety, financial securities, and transshipment

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Provisions relating to transport and transport equipment, including: air transport; sea transport; and multimodal transport

Provisions relating to the movement of persons

Provisions relating to the management of dangerous goods

Provisions relating to payment procedures

Provisions relating to the use of information and communication technologies

Provisions relating to the commercial practices and the use of international standards

Legal aspects of trade facilitation

The current WTO negotiations on trade facilitation are limited to the improving and clarifying of the General Agreement on Trade and Tariff (GATT) Articles V (Freedom of Transit), VIII (Fees and Formalities connected with Importation and Exportation), and X (Publication and Administration of Trade Regulations).

Trade Facilitation Status in Pakistan

Ministry of Commerce of Pakistan has published an elaborate status of the measures taken until 2008 to facilitate trade. Trade facilitation has been a priority area for Pakistan government since August 2001 when National Trade and Transport Facilitation Committee (NTTFC) was formed and work was initiated on a World Bank funded Trade and Transport Facilitation Project (TTFP) with technical assistance of UNCTAD. NTTFC is chaired by the Secretary, Ministry of Commerce and other members of the committee are from ministries, public and private sector organisations dealing with trade, transport, finance, customs and insurance. NTTFC has been working in coordination with the concerned ministries and them public/private stakeholders for adoption of various trade and transport facilitation measures.

IT based standardized Goods Declaration (GD) has gradually been introduced since 2001 that enables electronic submission of the Goods Declaration at all Customs stations in Pakistan, although hard copies of the documents are still required. The Customs Administration Reform (CARE) was initiated in 2002 to develop single window operation for all clearances. In 2005, Pakistan Customs Computerized System (PaCCS) was introduced under the CARE programme and is in place at the 3 container terminals which has introduced IT based paper free environment (Pakistan Ministry of Commerce 2008). PACCS replaced the former manual clearance system and a study at Custom House, Karachi identified 36 signatures and 62 control steps for the clearance of a normal import consignment (Bashir 2007).

After the introduction of PACCS, traders have a dedicated login for accessing PACCS which is comprised of four essential components. Firstly, TARIP (Tariff & Integrated Policy) that provides complete information of regulations for import or export of cargo to & from Pakistan. Secondly, INTRA (Integrated Regulatory Authorities) which is an online nationwide network connecting all stakeholders including Government Ministries & Departments, Central Board of Revenue and its wings, all Customs Collectorates, all Sales Tax Collectorates, State and commercial banks. All software for all stakeholders is provided by PACCS. INTRA provides online registers and accounting.

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Thirdly, ECHO (Enhanced Cargo Handling & Port Optimization) which is online connectivity between the carriers, PaCCS and Terminal Operator. Finally, the ACCESS (Automated Customs Clearance System) that covers, advanced Carrier declaration, advanced screening for Risky Cargo, goods declaration with off line support, payment management system, risk management system, assessment management system, clearance management system, status reporting system, law cell, adjudications, auctions, warehousing, licensing, transits and transhipments ( Ministry of Commerce 2008).

The Goods Declaration (GD) is processed through Risk Management Systems (RMS). ‘All information regarding receipt of request, clearance of cargo etc. is delivered through email. The system is based on self assessment and the Customs does not interfere in the process of discharge of legal liabilities of duties and taxes. Only consignments that are identified by the RSM as risky are subjected to the examination. The previous system required 100 percent examination of the consignments. Under PACCS the Goods Declaration (GD) for exports (Shipping Bill) is in itself a request for duty drawback. PACCS is also linked with commercial banks and central bank (State Bank of Pakistan) whereby the banks can monitor status of export cargo and regulate flow of foreign exchange remittances. This linkage has reduced a lot of paper-work between shipper, commercial banks and Customs’ (Bashir 2007).

Standardized trade documents based on UNLK have been introduced that include Goods Declaration, Phytosanitary Certificate and Certificate of Origin which are now in regular use. However, the standardized Commercial Invoice has not yet been adopted by the trade and industry. In accordance with the Convention on Facilitation of international Marine Traffic, 1965 (FAL Convention); Ships General Declaration, Crew List, Crew’s Effects Declaration, Passenger List, Ships’ Store Declaration have been introduced. The same forms can be used for submission to all the concerned organizations like Customs, Mercantile Marine Department, Port Immigration Department, Port Health Department and the port authorities. The data is received electronically by Pakistan Customs from the shipping companies or their agents (Ministry of Commerce 2008). Increasingly all the rules and regulations are being kept on internet for wider access. The in place arrangements meet almost all the requirements of Articles V, VIII and X.

Trading Environment in ECO countries

As far as simplification and standardization of documents is concerned, all ECO countries have instituted reforms and have made progress on this account. However, in CARS and Afghanistan, there is still scope for further reduction of documents by following the other ECO countries of Turkey and Pakistan (Tables D1-D2 Appendix). The number of export/import documents of CARs and Afghanistan are comparable with Turkey, Iran and Pakistan. However, it is the time to export/import and cost to export/import (US$ per container) that is in some cases as high as five times in CARs and Afghanistan as compared to Turkey, Iran and Pakistan (Table 7). It may not come as surprise as Afghanistan and CARs are landlocked countries and intermodal and multimodal communication and transportation infrastructure are also not well developed.

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Table 7 Trading Across Border (ECO countries)

Economy Documents to export (number)

Time to export (days)

Cost to export (US$ per

container)

Documents to import (number)

Time to import (days)

Cost to import (US$ per

container)Afghanistan 12 74 3,865 11 77 3,830

Azerbaijan 9 43 2,980 14 46 3,480

Iran, Islamic Rep.

7 25 1,090 8 32 1,735

Kazakhstan 10 81 3,005 12 67 3,055

Kyrgyz Republic 7 63 3,010 7 72 3,280

Pakistan 9 21 611 8 18 680

Tajikistan 10 82 3,350 9 83 4,550

Turkey 7 14 990 8 15 1,063

Uzbekistan 7 71 3,150 9 92 4,650

Source: Doing Business 2011

In case of number of documents required for export/import in CARs and Afghanistan, progress could be made through further regional negotiations for simplification and standardization of documents through regional trade agenda on trade facilitation. However, what is more important and which needs more focussed approach are institutional rigidities, imparting efficiency and smoothening the flow of goods in CARs and Afghanistan. Table D3 (Appendix) shows that time required for preparation of export/import documents is the most important component in the export/import procedures followed by inland transportation and handling procedures in CARs and Afghanistan. There is also room for improvement in custom clearance and reduction of technical controls in CARs and Afghanistan which is in contrast to Turkey, Pakistan and Iran (Table D4 Appendix). Pakistan is a good example where institutional reforms have not only reduced the number of documents required for import/export but also improved custom clearance and inland transportation and handling components of export/import procedures. ECO countries need to focus on removing institutional rigidities which will reduce the transaction and trade costs of products having trade potential in the ECO region and would help in further integrating the region. Trade costs affect a lot the competitiveness of the small and medium enterprises. Large firms can internalise additional costs by accruing benefits through economies of scale. On the other hand, small enterprises such as light engineering product sector of Pakistan having high price elasticity may find it uncompetitive due to additional costs incurred due to institutional rigidities.

Pakistan Transit Trade Agreements

Pakistan has so far signed the following transit trade agreements to facilitate transit transport to the neighbouring countries as well as to the CARs:

Transit Trade Agreement between Iran and Pakistan, 1975

Traffic in Transit Agreement between China, Kyrgyzstan, Kazakhstan and

Pakistan, 1995

Economic Cooperation Organization (ECO) Transit Transport Framework

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Agreement (TTFA), 1998

Afghanistan Pakistan Transit Trade Agreement (APTTA), 2010

ECO TTFA is the most comprehensive agreement. The TTFA was developed with the assistance of UNCTAD and was completed in May 1998. It came into force in May 2006 as a key driver for all activities related to the removal of non-physical barriers, to the harmonization of operations and regulations, and in the accession by Member States to international transport conventions and standards. TTFA is a broad based statement in depth with 8 protocols dealing with use of motor vehicles (third party insurance, white card system) and custom control and terms of reference for Transit Transport Coordination Council (TTCC) (ECO Secretariat 2011). It has been ratified by most of the member states of ECO, including Pakistan; however, it has not yet been implemented. Regional coordination is required to get the agreement implemented. Moreover the other older bilateral and multilateral transport agreements listed above need to be renegotiated in light of the ECO TTFA (Ministry of Commerce 2008).

Pakistan needs to sign the following international conventions listed for ratification/accession under the Programme of Action for ECO Decade of Transport and Communications (1998-2007) facilitating the transit transport:

Convention on Road Traffic (1968) Convention on Road Signs and Signals (1968) Customs Convention on the International Transport of Goods under cover of TIR Carnet

(1975) (TIR Convention) Customs Convention on the Temporary Importation of Commercial Road Vehicles (1956) Customs Convention on Containers (1972) International Convention on the Harmonization of Frontier Control of Goods (1982) Convention on the Contract for International Carriage of Goods by Road (CMR) (1956) New York Convention on Transit Trade of Landlocked States of 8 July 1965 Convention on Civil Liabilities for Damage caused during Carriage of Dangerous Goods by

Road, Rail and Inland Navigation Vessels (CRTD) of 10 October 1989 Agreement on the International Carriage of Perishable Food Stuffs and on the special

Equipment to be used for such Carriage (ATP) of 1 September 1970

Pakistan has so far acceded to only the Convention on Road Traffic and the Convention on Road Signs and Signals. TIR Convention is being discussed in the Government. However, so far there is no move for accession to the other conventions. These conventions need to be studied and acceded. In addition to the above the International Convention for the Unification of Certain Rules relating to Bills of Lading of 1924 (The Hague Rules), as amended by the Protocol of 1968 (Visby Rules) and SDR Protocol of 1979 also needs to be acceded to make the proposed Carriage of Goods by Sea Act applicable internationally (Ministry of Commerce 2008).

ECO countries recognise the importance of transport sector in the ECO region as it holds the key to the development of intra-regional and inter-regional trade. The Transit Transport Coordination Committee (TTCC) of ECO countries monitors the implementation of TTFA through five technical committees on Legal, Insurance, Road, Railway and Transit Trade matters with a view to further promote transit trade among ECO countries. In this regard, a successful demonstration run of the ECO container train on Islamabad-Tehran-Istanbul Route was launched on 14th August, 2009. Subsequently, a High Level Working Group was formed on the ECO Container Train on Islamabad-Istanbul Route to finalize all matters related such as adoption of timetable of the enroute countries, tariff rates and charges, marketing arrangements, technical and operational issues, uniform rules and regulations on the operation of the train and other issues related to customs clearance and a

14

Mechanism for Effective Route Management. The 1st Meeting of the High Level Working Group (HLWG) on Custom Issues pertaining to the ECO Container Train on Islamabad-Tehran-Istanbul route was held on 19 June, 2010 in Tehran which discussed issues namely Utilization of single declaration forms and guarantee mechanism, consideration of a sample seal proposed by Pakistan; discussion on special arrangements for processing the clearance of the trains made by enroute countries (ECO Secretariat 2011). In Pakistan, The Gul Container Train will now run on Islamabad/Lahore-Quetta-Kohi Taftan-Tehran-Istanbul Route on every first Thursday of every month covering a distance of 6443 Kms in 11 days.

The above train can be connected to cargo train between Tehran-Almatay, CARs and Europe. Subsidized carriage rates have been introduced by the three states to promote intra-regional and inter-regional trade which are shown in Table 8 (Pakistan Railway 2011).

Similarly, a demonstration caravan, the ECO/IRU Silk Road Truck Caravan, comprising trucks from all member states except Kyrgyz Republic and Uzbekistan, made an 11,500 km journey during 25 days in September 2010 across Pakistan, Iran, Turkmenistan, Afghanistan, Tajikistan, Azerbaijan. The preliminary results of the demonstration caravan indicated

that it has achieved its set objectives in identifying the following main physical and non-physical barriers, notably at borders, which impede the full implementation of the TTFA (ECO Secretariat 2011).

Wasting time for checking trucks. Unofficial payments.

Problems in visa for drivers.

Lack of standard trucks.

Limited role given to chamber of commerce and national freight forwarder associations.

Difference in fuel prices in the member states.

Limited human resources in terms of both number and training.

Limited institutional capacity and cumbersome regulations and border crossing formalities.

Underdeveloped border crossing points in terms of buildings and equipments.

Lack of automation and application of goods practices such as single window system.

Inadequate facilities enroute for transit drivers, such as TIR parking, efficient administrative consular support, standard road, transit oriented truck repair and maintenance centers.

Difference or divergence in rules and regulations governing transit transport.

Difference in standards in relation to vehicles (both for tractor and trailer) and roads.

Table 8 Rate per Container per kilometer in Euro

DESCRIPTION PAKISTAN IRAN TURKEY

40 feet (FEU)

20 feet (TEU)

0.27

0.18

0.31

0.25

0.28

0.22

Source: Pakistan Railway

15

Lack of road signs and easily accessible travel information.

By resolving the existing trade barriers, transit trade by road can be improved between the ECO member States and other region such as EU. The following sets of recommendations have been given by the ECO Secretariat (2011).

Enhancement of the implementation of the related international and regional conventions, particularly TTFA, TIR, and CMR.

Expedite accession of Member who are not parties of International Convention to having harmonization rules and regulation in the region

Streamlining national rules and regulation in line with the international convention. Development and implementation of comprehensive training and capacity building

programmes for the relevant institutions. Modernization of border crossing points (custom facilities and transit terminals) both in

terms of physical infrastructure and automation. Modernization and Standardizing of transit fleet. Modernization of road networks with emphasis on transit routes. Updating the data and statistical information on transit transport with providing facilities to

be accessed by each concerned authority of member. Active participation in the regional meetings, workshops, and projects related to road

transport, border crossing issues and the related international conventions and agreements.

The ECO Secretariat and International Road Transport Union (IRU) have agreed to develop a joint course of actions for monitoring regular run of trucks in the ECO region. In order to promote intra-regional transport, efforts are underway to launch White Card System which is a regional Motor Vehicle Third Party Liability Insurance Scheme and is an interim mechanism proposed by TTFA until all ECO Member States join the international Green Card System. The draft report on ECO White Card has been circulated to the member states for comments and proposals. In addition, as per Article 12 of the Transit Transport Framework Agreement (TTFA), contracting parties are committed to grant visas to drivers and persons engaged in international transit traffic operation, multiple entry and transit visas valid for a period of one year with the right of stay in the territory of each Contracting party for 15 days in transit for each trip and for up to more 5 days in place of loading and discharge. So far, Iran, Tajikistan, Pakistan and Turkey have nominated the authorized bodies to endorse visa applications of the drivers of vehicles and persons engaged in international transport through issuing introductory letters. Other Member States have been requested to nominate their relevant authorizing bodies. The Islamic Republic of Iran has prepared the draft ECO Common Visa Sticker for drivers and other persons involved in transit transport and a request has also been made to the Iranian government to draft procedures and modalities for issuance of ECO Visa (ECO Secretariat 2011).

ECO countries except Pakistan and Afghanistan are increasingly making use of TIR Carnets for promoting intra-regional and inter-regional trade. The TIR Carnet is a customs transit document used for the international transport of goods in transit and is established by the guaranteeing association. It is taken care by the customs services in the departure country and serves as reference document for customs control in the departure, transit and destination countries. The Carnet contains a variable number of pages according to the number of borders which will be crossed during the transport. It can contain 4, 6, 14 or 20 pages as 2 pages are used by country; the number of pages indicates the number of crossed countries, departure and destination country included. According to

16

Source: ECO Secretariat

the TTFA, the TIR Convention 1975 has been recognized as underlying transit system among the member States. The ECO has a mandate to strengthen the implementation of the TIR system in the region and facilitate the operation of this system in the Member States. All ECO Member States, except Pakistan are Contracting Parties to the TIR Convention. The first ratification of the TIR Convention in the region dates from 1983 for Afghanistan, 1985 for Turkey and Iran, 1996 and 1997 for the CARs (ECO Secretariat 2011).

The share of TIR Carnets issued to ECO countries has increased over time. The share of the ECO countries, TIR operational in 1996, represented 12 percent of the total number of Carnets issued globally. This share increased to about 30 percent in 2007. The ECO Member States are representing more than one fourth of the global usage of TIR operations. For example, the number of TIR Carnets issued to ECO countries was 611,050 in 2009 out of total 2,330,400 TIR Carnets issued globally. In 2009, ECO TIR operators used TIR Carnets to deliver goods in the ECO Member States (52 percent), EU market (37 percent), while deliveries to Russia, Belarus and Ukraine represented about 7 percent. The remaining 3 percent were used for the deliveries by ECO operators to other countries and regions. This demonstrates the importance of TIR Carnets in the ECO region and the dynamic environment for the ECO region transport industry. The Turkish, Iranian and Kazakh operators are the major users of the TIR procedures in the ECO region. Country wise usage of TIR Carnet is shown in the figure. In the ECO region, TIR scheme is heavily realized by ECO operators and 77 percent of TIR deliveries in the ECO region are performed by ECO operators while only 16 percent are realized by EU operators and 8 percent by Russian, Belarusian, Ukrainian and others (ECO Secretariat 2011).

Afghanistan has borders with 6 countries out of which 4 are TIR Contracting Parties and 5 are Members of ECO. Furthermore, Afghanistan has a road network connecting Afghanistan to Pakistan on the East, Tajikistan and Uzbekistan on the North, Turkmenistan on the North-West and Iran on the West. Even though, Afghanistan is a Contracting Party to the TIR Convention since 1983, however, due to political difficulties, the usage of the TIR Carnet procedures was interrupted to date. Pakistan is not yet a signatory to the TIR Convention; however, it has land connection to Afghanistan and Iran, both ECO Members and TIR signatories. Efforts are underway for the ratification of the TIR Convention and joining by Pakistan could facilitate access by sea to Central Asian Republics, thus realizing the opening of a vertical corridor benefiting to the regional trade and economy (ECO Secretariat 2011).

Pakistan exporters also realize the importance of export of goods by road to Turkey through Iran. They are of the opinion that transit time between Pakistan and Turkey is prohibitive and discourages development of trade. In addition, opportunities exist for textile exporters as Turkish textile mills are relocating to Egypt. As Pakistan has strong textile base, Turkish mill owners may be willing to relocate their plants to Pakistan if the road transport mechanism is improved by signing road transport

agreements. In this regard, Pakistan has signed bilateral road transport agreements with Iran (June

17

2008), Turkey (June 2003) and with Uzbekistan (March 2007). Pakistan has already ratified the agreements with Iran and Uzbekistan and ratification is pending on the other side. With Turkey, Pakistan is in the process of ratification of agreement. In order to further develop the road transport, Pakistan is in the process of devising mechanism to regulate freight forwarders and improve the system of transport in containers instead of open trucks for inland and export destinations (Ministry of Commerce 2010).

Policy Discussions

Pakistan does not export light engineering and made up products in large amounts to ECO countries that amounted to US$ 49.81 million and US$ 10.15 million in 2010 respectively. However, Afghanistan occupies a special place in the ECO region as 99.3 percent of the total exports of light engineering products to ECO countries goes only to Afghanistan. In case of made up articles, Afghanistan, Turkey and Iran are major export markets while the exports to CARs is negligible. However, it is not the case that there is no export potential of these two product groups in the CARs region. Other countries are exporting items from light engineering and made up articles groups at the same level of tariffs. Until 2011, the transit trade with Afghanistan was done under Afghanistan Transit Trade Agreement (ATTA) 1965. On 28th October 2010, Pakistan and Afghanistan signed Afghanistan Pakistan Transit Trade Agreement (APTTA) that superseded ATTA. APTTA was to be implemented from February 2011 but it became operational in June 2011 due to replacement of bank guarantees with insurance guarantees for goods carrying vehicles. The implementation of APTTA would help Pakistani exporters to gain access to ECO countries of Tajikistan, Uzbekistan, Turkmenistan and Iran through transit trade designated trade routes under APTTA agreement but access to other CARs (except mentioned above) would be limited as Pakistan has not yet concluded transit trade agreements with CARs. The experience of APTTA has demonstrated that contracting parties experience considerable delay between signing and implementation of transit trade agreements as the later envisages formulating a regulatory framework to the satisfaction of both parties.

The analysis highlights the presence of ‘behind and beyond the border constraints’ in the ECO region. Regional framework under ECO can be used for removing ‘beyond the border obstacles’, however, it may take time as it is beyond the control of Pakistan to institute reforms, therefore, it is important for Pakistan to remove ‘behind the border constraints’ for enhancing exports to ECO region. These constraints may be due to product standards, conformity assessment measures, business facilitation, trade finance, e-commerce, transport issues, political will and logistic services which are broadly defined under socio-economic-political and infrastructure reasons. Focussing on these issues will result in efficient and predictable processes through transparency of trade rules, reduced risk and uncertainty of trade rules and efficient services. ADB and UNESCAP (2009) provide the estimate of trade transaction costs as ranging from 1 percent to 15 percent of traded goods value depending upon products, modes of transport, transport routes and type of traders. The transaction costs entail direct costs (cost of preparing documents, complying with customs and other regulations) and indirect costs (opportunity cost associated with time and delays in moving the goods from buyer to seller and which has been estimated to be 80 percent of the total transaction cost). Trade transaction costs are due to institutional costs, regulatory and institutional costs and equipment and training costs.

18

Efficient trading environment requires an optimal mix of improvement of physical infrastructure and regulatory reforms. The comprehensive approach to trade facilitation requires focussing on sectors that have the closest link to trade (ADB and UNESCAP 2009) such as transport, logistics and telecommunication. In transport, efficiency of ports, international transport links and internal transport networks matter for reducing trade costs. In logistics, efficient freight forwarders, distributors and other logistic service providers influence trade costs while in telecommunications, it is obtaining information on market conditions and concluding deals with foreign buyers and sellers. With these points in mind, telephonic interviews were conducted with the stakeholders. They are of the view that until now except for Afghanistan, Turkey and Iran, goods to remaining ECO countries (CARs) are mostly transported by air due to absence of transit trade agreements and requisite regulatory framework. In addition, by air mode of transport is very costly and as almost all the carriers are passenger aircrafts which results in the availability of limited space for export cargo. In addition, this process is also time consuming as the passenger aircrafts are first routed to the hub of the airline that may result in cargo in some cases to take a week to reach its destination. For perishables and bulky items, this may not be a feasible option. Due to absence of well developed trade with CARs, network of freight forwarders is also not well established. In addition, due to non-existence of road transports and transit trade agreements with CARs, it has been reported that Pakistani origin goods are transhipped to CARs via Afghanistan by declaring these goods as Afghanistan origin goods in the Goods Declaration form for export from Afghanistan to CARs. Except for Turkey and Afghanistan, the financial links are also not well established and these need to be taken in bilateral services trade negotiation talks for reducing trade transaction costs.

The analysis has shown that except Pakistan and Afghanistan, all ECO countries are utilizing TIR Carnet for promoting intra-regional and inter-regional trade. Pakistan is not yet a signatory to TIR Carnet Convention. Geo-political considerations may be hampering the signing and availing of TIR Carnet. Pakistan needs to sign TIR Carnet convention to overcome this soft political barrier in the absence of transit trade agreement. As the difference in trading environments between the two countries creates trade barrier, TIR carnet can be used as a single document for enhancing trade in the region. However, TIR Carnet relates to goods themselves and is one aspect of the goods in transit. The other aspect is the modalities associated with the physical movement of goods through the territory such as commercial transport services regulations, traffic and vehicle regulations and this constitute the basis for regional and bilateral transport agreements (ADB and UNESCAP 2009). Pakistan also needs to sign these convention and treaties for making use of TIR Carnets to promote intra-regional trade.

ECO Secretariat also organised demonstration run of container railway on Islamabad-Teharan-Istanbul Route and truck caravan across Pakistan, Iran, Turkmenistan, Afghanistan, Tajikistan and Azerbaijan that identified ‘behind and beyond the border constraints’ which are hampering trade growth in the region. The recently Pakistan government initiative of starting the Gul Container Train on Islamabad/Lahore-Quetta-Kohi Taftan-Tehran-Istanbul Route on every first Thursday of every month is a good step, however, it falls short of taking full advantage of this mode of transport. Although, rail transport is cost effective, saves time and better than sea transport yet introducing it once a month takes away all these advantages. As the space is limited, for most of exporters, it equates the time to one month for sending goods to Iran and Turkey either by sea or train as exporters who want to send their goods by train will have to wait for next month which then makes them indifferent in sending goods by sea or train. If the frequency of this cargo train run is increased,

19

it could be particularly helpful to the upcountry exporters as it could reduce the shipment time by one fourth and would lessen the burden on our ports and road infrastructure.

However, it is important that trans-border cargo facilities should be developed at border crossings as the railway track gauges are different at border crossings with ECO countries that require loading and unloading of cargoes across borders. In addition, bus terminals, truck terminals and trading warehouses need to be developed at all the border crossings irrespective of mode of transport due to in nascent transit trading regimes in the region and also due to high negative price elasticity of imports demand function for export products due to institutional rigidities under trade facilitation framework. Djankov et al (2006) estimated that 1-day delay in product shipment reduces trade by 1 percent and could reduce relative export competitiveness of time-insensitive goods by 1 percent and time-sensitive goods by 7 percent. As trade costs affect a lot the competitiveness of the small and medium enterprises while large firms can internalise additional costs by accruing benefits through economies of scale, it is necessary that government may take measures to facilitate small and medium size exporters. Government of Pakistan has announced Textile Policy 2009-14. In the policy, besides focussing on increasing the supply base of products, this policy also proposes measures such as building export houses and subsidized insurance schemes that could be helpful in increasing Pakistan exports to ECO countries.

Policy Recommendations

1) Although signing of APTTA has given Pakistan access to few ECO countries, it is important that Pakistan government may take steps to expedite the operationalization of transit trade agreements with CARs by finalizing procedural protocols with the respective governments.

2) The analysis highlighted the presence of ‘beyond the border constraints’ in the ECO region and Pakistan can use regional framework under ECO for removing ‘beyond the border obstacles’.

3) Pakistan may sign TIR Carnet Convention as most of ECO countries are using TIR Carnet regimes and which has proved to be instrumental in promotion of intra-regional trade.

4) Pakistan also needs to sign other procedural protocol and conventions for making use of TIR Carnets such as commercial transport services regulations, traffic and vehicle regulations.

5) The government of Iran may be requested to expedite the ratification of bilateral road transport agreement for enabling Pakistan exporters to get access to Turkey and European markets through roads.

20

6) Efforts may be made to establish a network of freight forwarders in the ECO region especially in the CARs to facilitate intra-regional trade.

7) The frequency of the proposed Gul container train may be increased to take advantage of this cheap and time saving mode of transport.

8) Government of Pakistan may make efforts to facilitate in arranging cargo flights to CARs.

9) Cross border facilities should be established and developed at all border crossings with ECO countries such as bus terminals, truck terminal and trading warehouses to facilitate trade.

10) Financial links may be established and subsidized insurance schemes may be introduced to promote trade in the region.

21

Appendix

Definitions

Concentration index:

Concentration index, also named Herfindahl-Hirschmann index, is a measure of the degree of market concentration. It has been normalized to obtain values ranking from 0 to 1 (maximum concentration), according to the following formula:

where Hj = country or country group index xi = value of exports of product i

Diversification index:

The diversification index signals whether the structure of exports or imports by product of a given country or group of countries differ from the structure of product of the world. This index that ranges from 0 to 1 reveals the extent of the differences between the structure of trade of the country or country group and the world average. The index value closer to 1 indicates a bigger difference from the world average.

Diversification index is computed by measuring absolute deviation of the country share from world structure, as follows:

where hij = share of product i in total exports or imports of country or country group j

hi = share of product i in total world exports or imports. (Source: UNESCAP)

253 4 0 2,3,233,16

-1 False 0,0,0,9 0:MSel,

0:MSel, 0:MSel,0,234,283 0:MSel, 2:MUnSel, 3:MUnSel, 0:MSel,1,2,3,4,5,6

16:MUnSel, 233 48 3,1 2 0

T11534 11534 0 0 0

0 0 1 5 0

0 False 0 0 0 0

0 UNCTAD, UNCTA 2,2,2,2 3,3,3,3 1 4

22

1 1 0.50,0.50,0.50,0.5 1 1 20

20 -1 14 0

False P,1,14 ,P,5,2,8,4,23,3,19 0

0 32 0 1 300

True False

False False False 0

True False

eng eng 0 Show TableView I XLS

1 2 /TableView er/tab en

True False True 0

True False ,Reports,%3cdiv+ ,javascript%3aOn 374

1362 True Concentration an /TableView er/tab 500000 True

False

253 4 0 2,3,233,16

-1 False 0,0,0,9 0:MSel,

0:MSel, 0:MSel,0,234,283 0:MSel, 2:MUnSel, 3:MUnSel, 0:MSel,1,2,3,4,5,6

16:MUnSel, 233 48 3,1 2 0

T11534 11534 0 0 0

0 0 1 5 0

0 False 0 0 0 0

0 UNCTAD, UNCTA 2,2,2,2 3,3,3,3 1 4

1 1 0.50,0.50,0.50,0.5 1 1 20

20 -1 14 0

False P,1,14 ,P,5,2,8,4,23,3,19 0

0 32 0 1 300

True False

False False False 0

True False

eng eng 0 Show TableView I XLS

1 1 /TableView er/tab en

True False True 0

True False ,Reports,%3cdiv+ ,javascript%3aOn 374

1362 True Concentration an /TableView er/tab 500000 True

False

TRADE COMPLEMENTARITY INDEX

23

Where d is the importing country of interest, s is the exporting country of interest, w is the set of all countries in the world, i is the set of industries, x Is the commodity export flow, X is the total export flow, m the commodity import flow, and M the total import flow. In words, we take the sum of the absolute value of the difference between the sectoral import shares of one country and the sectoral exportshares of the other. Dividing by 2 coverts this to a number between 0 and 1, with zero indicating all shares matched and 1 indicating none did. Subtracting from one reverses the sign, and multiplying by 100 puts the measure in percentage terms.(Source: UNESCAP)

Revealed Comparative Advantage (RCA)

The RCA index is defined as the ratio of two shares. The numerator is the share of a country’s total exports of the commodity of interest in its total exports. The denominator is share of world exports of the same commodity in total world exports. Revealed comparative advantage indices (RCA) use the trade pattern to identify the sectors in which an economy has a comparative advantage, by comparing the country of interests’ trade profile with the world average. It takes a value between 0 and +∞. A country is said to have a revealed comparative advantage if the value exceeds unity. (Source: UNESCAP)

Table A 1 Pakistan’s exports of Light Engineering products in 2010 US$ 000

HS CODE Description ECO World

1 730890 Structures&parts of structures,i/s (ex prefab bldgs of headg no.9406) 45105 46212

2 841451 Fans: table,roof etc w a self-cont elec mtr of an output nt excdg 125W 3546 33666

3 842199 Parts for filterg or purifyg mchy & apparatus for liquids or gases,nes 480 520

4 841370 Centrifugal pumps nes 171 2648

5 841320 Hand pumps nes, o/t those of subheading No 8413.11 or 8413.19 143 148

6 841391 Parts of pumps for liquid whether or not fitted with a measurg device 79 638

7 847431 Concrete or mortar mixers 63 131

8 841459 Fans nes 59 238

9 841440 Air compressors mounted on a wheeled chassis for towing 54 376

10 850110 Electric motors of an output not exceeding 37.5 W 43 61

11 841340 Concrete pumps 26 54

12 841381 Pumps nes 16 247

13 842240 Packing or wrapping machinery nes 9 657

14 841330 Fuel, lubricating or cooling medium pumps for int comb piston engines 8 151

15 842129 Filtering or purifying machinery and apparatus for liquids nes 6 137

16 841420 Hand or foot-operated air pumps 5 38

17 841490 Parts of vacuum pumps, compressors, fans, blowers, hoods 3 3672

18 841319 Pumps fitted or designed to be fitted with a measuring device nes 1 170

19 730830 Doors,windows & their frames & thresholds for doors of iron or steel 0 194

20 731821 Washers, spring or lock, iron or steel 0 5

21 830210 Hinges of base metal 0 12

22 830300 Safes,safe deposit lockers,cash,deep/strong boxes&the like of base met 0 2

23 841311 Pumps w o w/o a meas device for disp fuel o lub in fillg stat o garage 0 227

24 841350 Reciprocating positive displacement pumps nes 0 940

25 841360 Rotary positive displacement pumps nes 0 0

26 841382 Liquid elevators 0 0

24

27 841392 Parts of liquid elevators 0 0

28 841410 Vacuum pumps 0 524

29 841480 Air or gas compressors, hoods 0 1379

30 841989 Machinery,plant/laboratory equip f treat of mat by change of temp nes 0 538

31 850120 Universal AC/DC motors of an output exceeding 37.5 W 0 20

32 850131 DC motors, DC generators, of an output not exceeding 750 W 0 0

33 850132 DC motors,DC generators,of an output exceedg 750 W but nt exceedg 75KW 0 3

34 850133 DC motors,DC generators,of an output exceedg 75 KW but nt > 375KW 0 3

35 850134 DC motors, DC generators, of an output exceeding 375 KW 0 0

36 850140 AC motors, single-phase, nes 0 1192

37 850151 AC motors, multi-phase, of an output not exceeding 750 W 0 2

38 850152 AC motors,multi-phase,of an output exceedg 750 W but not exceedg 75 KW 0 44

39 850153 AC motors, multi-phase, of an output exceeding 75 KW 0 60

40 850161 AC generators (alternators), of an output not exceeding 75 KVA 0 9

41 850162 AC generators, of an output exceeding 75 KVA but not exceeding 375 KVA 0 2

42 850163 AC generators,of an output exceeding 375 KVA but not exceeding 750 KVA 0 0

43 850164 AC generators, of an output exceeding 750 KVA 0 72

44 870540 Mobile concrete mixers 0 0

TOTAL 49817 94992

Source: Engineering Development Board, Pakistan and ITC Trade Map

25

Table A2 Disaggregated Analysis for CARS (Light Engineering products) Value (US$000)

Pakistan China Russia

HS Code Description Exports Tariff Exports Tariff Exports Tariffs

730890 Structures&parts of structures,i/s (ex prefab bldgs of headg no.9406)

6 0.1367 38000 0.1367 148351 0

841451 Fans: table,roof etc w a self-cont elec mtr of an output nt excdg 125W

0 0.0081 402 0.0081 108 0

842199 Parts for filterg or purifyg mchy & apparatus for liquids or gases,nes

0 0.0118 8161 0.0118 5744 0

841370 Centrifugal pumps nes 0 0.0079 27196 0.0079 24860 0

841320 Hand pumps nes, o/t those of subheading No 8413.11 or 8413.19

0 0.006 171 0.006 151 0

841391 Parts of pumps for liquid whether or not fitted with a measurg device

1 0.0086 7506 0.0086 11807 0

847431 Concrete or mortar mixers 0 Unknown 5962 Unknown 882 Unknown

841459 Fans nes 0 0.0043 3882 0.0043 6553 0

841440 Air compressors mounted on a wheeled chassis for towing

0 0.0227 1448 0.0227 337 0

850110 Electric motors of an output not exceeding 37.5 W

0 Unknown 23 Unknown 388 Unknown

841340 Concrete pumps 0 0.0145 1414 0.0145 301 0

841381 Pumps nes 6 0.0195 4401 0.0195 748 0

842240 Packing or wrapping machinery nes

0 0.0006 2389 0.0006 1508 0

841330 Fuel, lubricating or cooling medium pumps for int comb piston engines

0 0.0065 915 0.0065 2378 0

842129 Filtering or purifying machinery and apparatus for liquids nes

0 0.002 9929 0.002 2066 0

Total 13 111799 206182

Source: ITC Trade Map

Table A3 Disaggregated Analysis for Turkey (Light Engineering products) Value (US$000)

Pakistan Germany China

HS Code Description Exports Tariff Exports Tariff Exports Tariff


0 0 19383 0 7161 0


58 0 5969 0 3463 0


0 0 24063 0 6301 0

26

841370 Centrifugal pumps nes 171 0 55631 0 18021 0


0 0 870 0 11122 0


1 0 36092 0 3513 0

847431 Concrete or mortar mixers 0 Unknown 2890 0 704 Unknown

841459 Fans nes 0 0 38610 0 41036 0


0 0 430 0 3773 0


2 Unknown 20651 0 32122 Unknown

841340 Concrete pumps 26 0 16090 0 3012 0

841381 Pumps nes 5 Unknown 8155 0 7436 Unknown


0 0 47839 0 4496 0


6 0 15925 0 7805 0


0 0 53700 0 3028 0

Total 269 346298 152993

Source: ITC Trade

Table A4 Disaggregated Analysis for Iran (Light Engineering products) Value (US$000)

Pakistan China Germany


730890 Structures&parts of 18 0.145 36893 0.145 2312 0.145

27

structures,i/s (ex prefab bldgs of headg no.9406)


0 0.45 10509 0.45 166 0.45


0 0.04 14130 0.04 9015 0.04

841370 Centrifugal pumps nes 0 0.152 26375 0.2 77936 0.2


0 0.1535 674 0.225 702 0.225


0 0.082 5405 0.1 12829 0.1


841459 Fans nes 0 0.07 6174 0.07 7133 0.07


0 0.1133 1554 0.1133 241 0.1133



841340 Concrete pumps 0 0.2 474 0.2 3302 0.2

841381 Pumps nes 2 0.0831 7402 0.1667 702 0.1667


0 0.1 4842 0.1 47059 0.1


0 0.151 7983 0.175 13213 0.175


0 0.1075 5547 0.1075 2317 0.1075

Total 20 139947 179827


Table A5 Disaggregated Analysis for Afghanistan (Light Engineering products) Value (US$000)

Pakistan USA Russia



45081 0.025 2150 0.025 0 0.025


3488 0.05 546 0.05 0 0.05

28


480 0.05 205 0.05 9 0.05

841370 Centrifugal pumps nes 0 0.025 1983 0.025 188 0.025


143 0.08 29 0.08 0 0.08


77 0.05 1023 0.05 115 0.05


841459 Fans nes 59 0.05 661 0.05 104 0.05


54 0.025 325 0.025 0 0.025



841340 Concrete pumps 0 0.025 0 0.025 0 0.025

841381 Pumps nes 3 0.025 528 0.025 582 0.025


9 0.025 10 0.025 0 0.025


2 0.025 757 0.025 157 0.025


6 0.05 760 0.05 9 0.05

Total 49506 10183 1164

Table B1 Pakistan Made Up Exports to ECO Countries (Value in US$000)

CARs TURKEY IRAN Afghanistan Total

HS CODE DESCRIPTION Export Export Export Export

630629 - - - Of cotton 564 84 87 832 1567

630231 - - - Bed sheets, mill-made 0 1116 321 14 1451

630510 -Of jute or of other textile bast fibres of heading 53.03

0 0 952 0 952

631090 -Other 0 462 17 380 859

630539 - - Other 0 0 0 852 852

630210 - - - Bed sheets 0 782 1 27 810

630622 - - Of synthetic fibres 387 0 0 80 467

29

630260 - - - Towels, mill-made 1 384 76 3 464

630239 - - - Bed sheets 0 450 4 0 454

630900 Worn clothing and other worn articles. 7 0 205 214 426

630251 - - - Table-covers, mill-made 0 273 0 0 273

630229 - - Of other textile materials 0 272 0 0 272

631010 -Sorted 0 17 0 217 234

630790 - - - Shopping bags, knitted 9 56 37 131 233

630533 - - other, Of polyethylene or polypropylene strip or the like

0 156 0 27 183

630710 - - - Dish-cloth 45 20 59 2 126

630612 - - - Tarpaulins 0 0 57 49 106

630222 - - Of man-made fibres 0 70 0 0 70

630532 - - - Of a capacity of 1,000 Kg or more 0 0 0 61 61

630419 - - Other 0 0 0 50 50

630130 -Blankets (other than electric blankets) and travelling rugs, of cotton

0 0 0 20 20

630619 - - - Tarpaulins 0 0 0 13 13

630392 - - - Mill-made 0 0 7 0 7

Total 1013 4142 1823 2972 9950


Table B2 Disaggregated Analysis for CARS (Made ups ) Value (US$000)

Pakistan China Turkey

HS CODE DESCRIPTION Exports Tariff Exports Tariff Exports Tariffs

630629 - - - Of cotton 564 25.0% 515 25.0% 415 25.0%

630231 - - - Bed sheets, mill-made 0 22.2% 9012 22.2% 1719 22.2%


0 23.8% 15 23.8% 11 23.8%

631090 -Other 0 21.3% 0 21.3% 6 21.3%

630539 - - Other 0 17.3% 442 17.3% 55 17.3%

630210 - - - Bed sheets 0 21.6% 1460 21.6% 179 21.6%

630622 - - Of synthetic fibres 387 20.4% 1556 20.4% 129 20.4%

630260 - - - Towels, mill-made 1 20.1% 133959 20.1% 3751 20.1%

30

630239 - - - Bed sheets 0 22.5% 1672 22.5% 559 22.5%

630900 Worn clothing and other worn articles.

7 101.4% 74 101.4% 0 101.4%

630251 - - - Table-covers, mill-made 0 20.3% 19958 20.3% 147 20.3%

630229 - - Of other textile materials 0 23.5% 26 23.5% 33 23.5%

631010 -Sorted 0 21.0% 0 21.0% 1 21.0%

630790 - - - Shopping bags, knitted 9 20.2% 1423 20.2% 525 20.2%


0 15.9% 44025 15.9% 892 15.9%

630710 - - - Dish-cloth 45 20.3% 2848 20.3% 907 20.3%

630612 - - - Tarpaulins 0 20.6% 4900 20.6% 53 20.6%

630222 - - Of man-made fibres 0 20.7% 17812 20.7% 119 20.7%

630532 - - - Of a capacity of 1,000 Kg or more 0 15.2% 2634 15.2% 420 15.2%

630419 - - Other 0 24.0% 241 24.0% 1775 24.0%


0 20.5% 49846 20.5% 381 20.5%

630619 - - - Tarpaulins 0 22.2% 424 22.2% 22 22.2%

630392 - - - Mill-made 0 20.2% 598 20.2% 1658 20.2%

Total 1013 293440 13757


Table B3 Disaggregated Analysis for Turkey (Made ups ) Value (US$000)

Pakistan China India

HS CODE DESCRIPTION Exports Tariff Exports Tariff Exports Tariff

630629 - - - Of cotton 84 9.6% 168 9.6% 0 9.6%

630231 - - - Bed sheets, mill-made 1116 9.6% 3766 9.6% 306 9.6%


0 2.4% 1 2.4% 3280 2.4%

631090 -Other 462 0.0% 6 0.0% 0 0.0%

630539 - - Other 0 5.8% 130 5.8% 0 5.8%

630210 - - - Bed sheets 782 9.6% 22 9.6% 42 9.6%

630622 - - Of synthetic fibres 0 9.6% 1559 9.6% 0 9.6%

630260 - - - Towels, mill-made 384 9.6% 687 9.6% 299 9.6%

31

630239 - - - Bed sheets 450 9.6% 87 9.6% 62 9.6%

630900 Worn clothing and other worn articles. 0 4.2% 5 4.2% 0 4.2%

630251 - - - Table-covers, mill-made 273 9.6% 246 9.6% 708 9.6%

630229 - - Of other textile materials 272 9.6% 19 9.6% 14 9.6%

631010 -Sorted 17 0.0% 0 0.0% 272 0.0%

630790 - - - Shopping bags, knitted 56 6.2% 15318 6.2% 162 6.2%


156 7.7% 682 7.7% 27 7.7%

630710 - - - Dish-cloth 20 6.9% 5771 6.9% 11 6.9%

630612 - - - Tarpaulins 0 9.6% 333 9.6% 0 9.6%

630222 - - Of man-made fibres 70 7.6% 114 7.6% 2 7.6%

630532 - - - Of a capacity of 1,000 Kg or more 0 6.8% 336 6.8% 89 6.8%

630419 - - Other 0 9.6% 978 9.6% 229 9.6%


0 7.8% 51 7.8% 334 7.8%

630619 - - - Tarpaulins 0 9.6% 64 9.6% 0 9.6%

630392 - - - Mill-made 0 7.6% 486 7.6% 105 7.6%

Total 4142 30829 5942


Table B4 Disaggregated Analysis for Iran (Made ups ) Value (US$000)

Pakistan ChinaHS CODE

DESCRIPTION Exports Tariff Exports Tariff

630629 - - - Of cotton 87 56.8% 601 65.0%

630231 - - - Bed sheets, mill-made 321 63.4% 1651 65.0%

630510 -Of jute or of other textile bast fibres of heading 53.03 952 65.0% 987 65.0%

631090 -Other 17 100.0% 91 100.0%

630539 - - Other 0 65.0% 309 65.0%

630210 - - - Bed sheets 1 63.4% 1463 65.0%

630622 - - Of synthetic fibres 0 56.8% 2461 65.0%

630260 - - - Towels, mill-made 76 56.8% 7212 65.0%

32

630239 - - - Bed sheets 4 63.4% 90 65.0%

630900 Worn clothing and other worn articles. 205 100.0% 3639 100.0%

630251 - - - Table-covers, mill-made 0 63.4% 437 65.0%

630229 - - Of other textile materials 0 65.0% 645 65.0%

631010 -Sorted 0 100.0% 0 100.0%

630790 - - - Shopping bags, knitted 37 45.0% 13633 45.0%

630533 - - other, Of polyethylene or polypropylene strip or the like 0 63.4% 2764 65.0%

630710 - - - Dish-cloth 59 65.0% 7112 65.0%

630612 - - - Tarpaulins 57 65.0% 431 65.0%

630222 - - Of man-made fibres 0 65.0% 1825 65.0%

630532 - - - Of a capacity of 1,000 Kg or more 0 65.0% 574 65.0%

630419 - - Other 0 65.0% 5786 65.0%


0 95.0% 2052 95.0%

630619 - - - Tarpaulins 0 56.8% 156 65.0%

630392 - - - Mill-made 7 65.0% 4161 65.0%

Total 1823 58080


Table B5 Disaggregated Analysis for Afghanistan (Made ups ) Value (US$000)

Pakistan China

HS CODE DESCRIPTION Exports Tariff Exports Tariff

630629 - - - Of cotton 832 10.0% 494 10.0%

630231 - - - Bed sheets, mill-made 14 10.0% 0 10.0%

630510 -Of jute or of other textile bast fibres of heading 53.03 0 10.0% 0 10.0%

631090 -Other 380 10.0% 0 10.0%

630539 - - Other 852 10.0% 0 10.0%

630210 - - - Bed sheets 27 10.0% 1 10.0%

630622 - - Of synthetic fibres 80 10.0% 230 10.0%

33

630260 - - - Towels, mill-made 3 10.0% 6 10.0%

630239 - - - Bed sheets 0 10.0% 0 10.0%

630900 Worn clothing and other worn articles. 214 10.0% 0 10.0%

630251 - - - Table-covers, mill-made 0 10.0% 0 10.0%

630229 - - Of other textile materials 0 10.0% 0 10.0%

631010 -Sorted 217 10.0% 0 10.0%

630790 - - - Shopping bags, knitted 131 10.0% 69 10.0%

630533 - - other, Of polyethylene or polypropylene strip or the like 27 10.0% 0 10.0%

630710 - - - Dish-cloth 2 10.0% 0 10.0%

630612 - - - Tarpaulins 49 10.0% 0 10.0%

630222 - - Of man-made fibres 0 10.0% 1 10.0%

630532 - - - Of a capacity of 1,000 Kg or more 61 10.0% 0 10.0%

630419 - - Other 50 10.0% 0 10.0%

630130 -Blankets (other than electric blankets) and travelling rugs, of cotton 20 2.5% 81 2.5%

630619 - - - Tarpaulins 13 10.0% 0 10.0%

630392 - - - Mill-made 0 10.0% 0 10.0%

Total 2972 882


Table C1 Potential of ECO Countries (US$ Mn)

Potential Exports Technical EfficiencyPercentage

Light Engineering

Afghanistan 8.32 285.50

Turkey 0.21 61.86

Iran 0.21 69.36

Turkmenistan 0.93 0.31

Azerbaijan 0.37 0.19

Uzbekistan 1.09 0.29

Kazakhstan 0.56 -

34

Tajikistan 0.98 -

Kyrgyzstan 0.13 -

Made ups

Afghanistan 3.03 96.43

Turkey 5.11 71.53

Iran 1.67 46.10

Turkmenistan 0.86 -

Azerbaijan 1.03 33.69

Uzbekistan 1.31 8.13

Kazakhstan 1.22 2.24

Tajikistan 1.31 4.35

Kyrgyzstan 1.25 9.78Source: Author’s calculations

Table D1 Documents Required

Iran Turkey Pakistan AfghanistanExport documents

Import documents

Export documents

Import documents

Export documents

Import documents

Export documents

Import documents

Bill of lading Bill of lading Bill of lading Bill of lading Bill of lading

Bill of lading

Bill of lading Bill of lading

Certificate of origin

Cargo release order


Cargo release order


Cargo release order


Cargo release order

Commercial Invoice


Commercial invoice


Commercial invoice


Clean inspection report of

Commercial invoice

35

findingsCustoms export declaration

Commercial invoice

Customs export declaration

Commercial invoice


Commercial invoice

Commercial invoice

Customs import declaration

Insurance policy Customs import declaration

Packing list Customs import declaration

Delivery order



Import license

Packing list Insurance policy Preferential certificate

Import license Inspection report

Insurance certificate

Customs transit document


Technical standard/health certificate

Packing list Technical standard/health certificate



Packing list Duties exemption form

Packing list


Terminal handling receipts

Packing list Terminal handling receipts


Tax certificate

Tax certificate


Tax certificate



NOC/Transit permit

NOC/Transit permit


Table D2 Documents Required

Azerbaijan Tajikistan Uzbekistan Kyrgyzstan Kazakhstan

Export documents

Import documents

Export documents

Import documents

Export documents

Import documents

Export documents

Import documents

Export documents

Import documents

Bill of lading Bill of lading

Bill of lading

Bill of lading

Bill of lading

Bill of lading

Transit document (schedule of transit)

Transit document (schedule of transit)

Export license

Transit document


Cargo release order

Sale Purchase Contract




Bill of lading


Inspection report


36

Commercial invoice



Commercial invoice

Commercial invoice

Commercial contract


Bill of lading

Packing list Inspection report


Commercial invoice

Commercial invoice



Commercial invoice

Commercial invoice


Tax certificate

Packing list

Certificate of Quality

Contract with supplier

CMR Inspection report

Packing list Packing list Contract Commercial invoice


Tax certificate

Packing list Customs import declaration



Import transaction passport



Bill of lading


Power of attorney


Confirmation of Payment

Tax certificate




Certificate of conformity

Certificate of conformation


Selling contract

Transit document


Inspection report


Bill of lading

Transit document

Customs transit document




Commercial invoice

Cargo release order

Import license



Certificate of conformation

Packing list Certificate of origin

Shipping invoice

Commercial invoice


Table D3 Trading Across Borders

Indicator Azerbaijan Afghanistan Tajikistan Uzbekistan Kazakhstan South Asia

Eastern Europe

& Central

Asia

OECD

37

Documents to export (number) 9 12 10 7 10 8.5 6.4 4.4

Time to export (days) 43 74 82 71 81 32.3 26.7 10.9

Cost to export (US$ per container)

2,980 3,865 3,350 3,150 3,005 1,511.60 1,651.70 1,058.70

Documents to import (number) 14 11 9 9 12 9 7.6 4.9

Time to import (days) 46 77 83 92 67 32.5 28.1 11.4

Cost to import (US$ per container)

3,480 3,830 4,550 4,650 3,055 1,744.50 1,845.40 1,106.30

Nature of Export Procedures Duration (days)

Duration (days)

Duration (days)

Duration (days)

Duration (days)

US$ Cost US$ Cost

Documents preparation 27 44 20 32 26 590 180

Customs clearance and technical control

5 8 2 4 18 600 125

Ports and terminal handling 4 4 2 8 11 175 375

Inland transportation and handling

7 18 58 27 26 2500 2300

Totals 43 74 82 71 81 3865 2980

Nature of Import Procedures Duration (days)

Duration (days)

Duration (days)

Duration (days)

Duration (days)

US$ Cost US$ Cost

Documents preparation 27 49 20 50 26 680 230


3 7 4 8 14 350 275

Ports and terminal handling 6 5 2 11 4 200 375


10 16 57 23 23 2600 2600

Totals 46 77 83 92 67 3830 3480


Table D4 Trading Across Borders

38

Indicator Kyrgyz Republic

Pakistan Turkey Iran, Islamic

Rep.

South Asia

Eastern Europe

& Central

Asia

OECD

Documents to export (number) 7 9 7 7 8.5 6.4 4.4

Time to export (days) 63 21 14 25 32.3 26.7 10.9

Cost to export (US$ per container)

3,010 611 990 1,090 1,511.60 1,651.70 1,058.70

Documents to import (number) 7 8 8 8 9 7.6 4.9

Time to import (days) 72 18 15 32 32.5 28.1 11.4

Cost to import (US$ per container)

3,280 680 1,063 1,735 1,744.50 1,845.40 1,106.30

Nature of Export Procedures Duration (days)

Duration (days)

Duration (days)

Duration (days)

US$ Cost US$ Cost

Documents preparation 23 11 6 12 590 180


3 3 3 2 600 125

Ports and terminal handling 3 3 3 4 175 375


34 4 2 7 2500 2300

Totals 63 21 14 25 3865 2980

Nature of Import Procedures Duration (days)

Duration (days)

Duration (days)

Duration (days)

US$ Cost US$ Cost

Documents preparation 25 11 8 19 680 230


11 2 3 2 350 275

Ports and terminal handling 3 3 3 5 200 375


33 2 1 6 2600 2600

Totals 72 18 15 32 3830 3480


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