Pakistan-Turkey Relations over free trade appears to have crumbled as the dispute has been taken to the WTO. The Free Trade Dispute between Pakistan and Turkey have been brewing for quite some time, but it seems the two nations have not reached an agreement. After lengthy deliberations over the Pakistan-Turkey Relations over Trade, they seem to have reached a dead end.
Turkey enjoys a GSP+ status over shared customs union with the EU. Pakistan has put across an argument that Turkey has not extended the status to Pakistan and Armenia, although it has with all other countries.
Pakistan-Turkey Relations and Reversal of Duties
In addition to the GSP+ status issue, the Pakistan-Turkey relations have also been rattled by Pak, demanding a reversal of extra duties that the government of Turkey had imposed on Pak produced goods that had a high potential for export in the Turkish market, in 2011. Since the beginning of 2015, Pakistan has been bringing up the issue of additional duties at the FTA but no solution has been churned out yet.
The Pak produced goods in question include fabrics, apparels, textiles, handmade fibres, footwear and plastics. The duties lie between 20-50%, mounting to the other duties payable. The result of these additional duties has been a severe loss for Pakistan as the exports to Pakistan fell rapidly from 2011 to 2017.
Pakistan-Turkey Relations over GSP+ and FTA
As reported by Dawn, a Pakistani daily, the ministry of commerce in Pak believes that Turkey must extend its GSP+ status with the country and a demand for the same was first made in 2014. Replying to the demand Turkey had extended the FTA proposal. In 2017, at the FTA meet, Pakistan again demanded that Turkey extends its GSP+ status or the two nations grant reductions in tariff for each other; thus giving the lowest tariff that any two countries share under the FTA.
To bridge the Pakistan-Turkey relations, the Turkish government proposed a reduction in the extra duties payable that were imposed in 2011, spreading across 5 years. However, the Pak commerce ministry rejected that proposal. The country further requested higher authorities to intervene and if that failed, the Turkish made products would be charged an additional retaliation tariff. Both recommendations were rejected.
The Joint Working Group Discusses the Pakistan-Turkey Relations
The end of 2017 brought together the Joint Working Group to discuss the strained Pakistan-Turkey relations on matters of commerce. Turkey stated that it would not extend its GSP+ status to any more nations than those it already shares it with.
The FTA meets to find a solution to the Pakistan-Turkey relations has already been twice extended. No more meetings are scheduled as of now and the two nations are at an enraged trade conflict with one another.