PakistanAgriculture Economy and Policy 3

snowmelt and monsoon rains. Improvements to Pakistan’s irrigation system—one of the

world’s largest—are critical to the future success of this sector.

Major issues facing Pakistan’s agricultural sector include a lack of adequate irrigation,

improved marketing infrastructure,WTO compliant sanitary and phyto-sanitary

regulations, development and implementation of food safety regulations, avian influenza

surveillance and public health measures, and the development of improved plant and

animal genetics.

General and Agricultural Trade Situation

Pakistan is one of the pioneering members of theWorld Trade Association (WTO) and is

an active member of various groups and alliances. Within the G-20, Pakistan has played a

pivotal and leading role. Pakistan joined the Cairns Group in 2005 to lobby for what it

deems a fair and market-oriented agricultural trading system. In negotiations on market

access, domestic support and export competition, Pakistan’s stance is supportive of the G-

20 collective position. Pakistan strongly supports improvement in market access by

reducing tariffs, reducing tariff escalation, and eliminating tariff peaks. Pakistan also

works closely with the Cairns Group on tropical products issues.

Pakistan has entered into Free Trade Agreements (FTA) with China, Malaysia and Sri

Lanka and has exchanged a draft FTA with Singapore which includes an investment

protection clause. In addition to WTO membership, Pakistan is party to two agreements

for regional trade liberalization: the Economic Cooperation Organization (ECO)

comprised of Turkey, Iran, Afghanistan, Azerbaijan, Kazakhstan, Kyrgyz, Tajikistan and

Turkmenistan; and the SouthAsian Association for Regional Cooperation (SAARC) with

India, Bangladesh, Sri Lanka, Bhutan, Nepal and the Maldives.

ATrade and Investment FrameworkAgreement (TIFA) has been in place between

Pakistan and the United States since July 2003. Both countries are now negotiating a

Bilateral Investment Treaty (BIT).

Trade and Trends

During FY 2006/07, Pakistan’s imports totaled $27 billion while exports were $17 billion.

Textiles dominate exports, accounting for 59 percent of export value. Other major exports

include rice, seafood and products, sporting goods, leather and products and carpets.

Major imports include petroleum, machinery, edible oil and chemicals. The GOP has had

limited success in bridging the gap as a widening trade deficit continues to strain

resources.

Agricultural Trade

Vegetable oil is the largest agricultural import, totaling 1.5 million tons annually. In FY

2006/07, Pakistan imported over $3.0 billion in agricultural products, including vegetable

oil ($883 million), cotton ($647 million), sugar ($313 million), pulses ($225 million), tea