Belgium Review


Pak- Belgium bilateral trade crossed over a billion dollars for the first time
by Professor Dr. Noor Ahmed Memon, Dadabhoy Institute of Higher Education.

Belgium was one of the first countries in the world to recognize Pakistan’s independence. It opened its Embassy in Karachi in December 1948. Belgian companies had very quickly understood the importance of Pakistan and have invested heavily in the country.

Pakistan and Belgium enjoyed good diplomatic relations and the latter was an important trading partner of Pakistan in the European Union. Among the important importing and exporting destinations for Pakistan in the EU, Belgium came at the third and sixth places respectively.

Pakistan diplomatic post in Belgium is important because Brussels is the headquarters of the European Union and NATO, among many other international organisations with which Pakistan maintain close contact. Pakistan has often lobbied to gain Belgium’s support in establishing the Pakistan-EU Free Trade agreement, as Belgium is the centre of European policy making.

A memorandum of understanding (MoU) for cooperation in business and investment has been signed by Trade Development Authority of Pakistan (TDAP) jointly with trade and investment bodies of three regions of Belgium This is for the first time that all the three regions of Belgium have jointly signed a MoU with any other country. 

Traditionally, bilateral trade has been in favour of Pakistan. It is great to see that the trade has crossed over a billion dollars for the first time in 2019, Increasing trends were witnessed both in imports and exports over the last two years, which led to a healthy transformation in bilateral trade. Pakistan and Belgium maintain healthy bilateral trade relations. The export volume of Pakistan to Belgium reached US$ 624 million while imports amounted to US$ 383 million in 2018-19.  Pak-Belgium trade is given in Table-1.

Table 1: Pak - Belgium Trade Balance
                                                                                  (Value: US$ million)

Year Export Import Balance of Trade
2014-15 497 328 +169
2015-16 503 435 +68
2016-17 590 388 +202
2017-18 712 327 +385
2018-19 624 383 +241
     Source: i) State Bank of Pakistan.
                  ii) Trade Development Authority of Pakistan.

Cotton fabrics and yarn, readymade garments, knitwear, towels, hosiery, art silk, carpet and rugs, leather gloves, sports goods and fish preparation, medical or surgical instruments are the major items exported from Pakistan to Belgium, as shown in Table 2.

Table 2: Export of textile and other products from Pakistan to Belgium
(Major Items)

Product

2018-19

2017-18

  Cotton Yarn

6,086 6,599

  Cotton Fabrics

43,897 58,936
  Readymade Garments 145,909 170,870
  Knitwear 121,175 147,808
  Textile Made-ups 9,782 10,359
  Bedwear 125,609 146,295
  Towels 15,046 20,061
  Tent and Canvas 122,018 470
  Art Silk 59,275 13,215
  Rice 10,286 59,563
  Leather Apparel & Clothing 6,700 8,047
  Leather Glovers 2,762 8,006
  Footwear 10,974 2,143
  Sports Goods 172 13,057
  Carpets 4,397 276
  Surgical Instruments 1,410 4,532
  Fish & Fish Preparation 353 275
  Vegetables 684 201

     Source: Trade Development Authority of Pakistan.

Pakistan Businessmen and Intellectuals Forum (PBIF) President Mian Zahid Hussain has said Belgium have the opportunity of investment in key sectors of the Pakistan economy including energy, transport, public works, civil engineering, environment, pharmaceuticals, consumer goods, and non-banking services. According to him, it’s due to better investment opportunities, easy government policies and comfortable environment.

Belgium can increase investment in several new and existing sectors including renewable energy, tourism, hospitality and dams. All Greenfield investment has been exempted from RD on import of plants and machinery and GST for five years, which is a benefit for all foreign investors.

Opportunities lie in various areas of Pakistan including human resource, minerals and agriculture sectors and the country possesses exceptional raw material for investment and has distinguished position in region. Single country exhibitions and trade visits should be increased to strengthen bilateral trade between the countries.

Table 3: Import of textile Machinery from Belgium to Pakistan
(Major Items)
                                                                                                       Value: Rs. 000

Machinery Unit 2016-17 2017-18
Quantity Value Quantity Value
 Weft Winding Machinery No 1 2,620 -- --
 Weaving Machines (Shutles) No 1,289 5,348,265 1,261 3,544,674
 Bobbies Jacquard Machines No 62 42,147 15 89,435
 Auxillary Machines No 6 3,892 3 33,213
 Reeds for Loom Kg 818 2,244 405 1,613
 Healds and Healds Frame Kg 3,085 15,955 2,617 10,772
 Shuttles Kg 90 401 976 4,054
 Sinkers Needless Kg 311 929 7 25
     Source: Belgian Foreign Trade Agency.

The human and natural resources of Pakistan are enough to make this country an industrial and financial hub as it plays vital roles in trade with Gulf and central Asian countries. Pakistan shares close and old bilateral relations with Belgium in different areas of interest including security, defence, science & technology and trade and economy. EU is the biggest export destination for Pakistan with 34% share of Pakistan's exports, however as per 2018, Belgium's share in total exports was 9% while imports to Pakistan were 6%.

References:

  1. Belgium eyes improved trade with Pakistan, Daily Dawn Pakistan
  2. Belgium sign MoU for cooperation in business, investment- Business Recorder
    dated 2019/02/2
  3. State Bank of Pakistan- Annual Reports
  4. Trade Development Authority of Pakistan
  5. Pakistan Bureau of Statistics.

 

 
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