NTM Pakistan Final With Covers

INVISIBLE BARRIERS TO TRADE
Pakistan:
Business perspectives
In collaboration with Supported by

Pakistan: Invisible barriers to trade
Business perspectives
About the paper
Upgrading quality infrastructure and enforcing quality compliance are key to Pakistan’s export development.
A survey of almost 1,200 companies on non-tariff measures found that more than half of Pakistani exporters
face regulatory or procedural trade-related obstacles.
The report recommends strengthening the quality and customs infrastructure in Pakistan. Adopting digitally
oriented solutions such as an integrated trade portal is essential to give necessary guidance to exporters.
Publisher: International Trade Centre
Title: Pakistan: Invisible barriers. Business perspectives.
Publication date and place: Geneva, June 2020
Page count: 82
Language: English
ITC Document Number: TMI-19-119.E
Citation: International Trade Centre (2020). Pakistan: Invisible barriers to trade. Business perspectives. ITC, Geneva.
For more information, contact Samidh Shrestha ([email protected])
For more information on NTM surveys, see www.ntmsurvey.org
ITC encourages the reprinting and translation of its publications to achieve wider dissemination. Short extracts of this paper may be
freely reproduced, with due acknowledgement of the source. Permission should be requested for more extensive reproduction or
translation. A copy of the reprinted or translated material should be sent to ITC.
Digital image(s) on the cover: © Shutterstock
© International Trade Centre (ITC)
ITC is the joint agency of the World Trade Organization and the United Nations.
By the ED / WB
ii
Pakistan: Invisibles barriers to trade
Foreword by the International Trade Centre
Better integration with the global value chain and increased exports are important for Pakistan’s economic
development through job creation – especially for youth and women. In fact, the country can potentially
increase its exports by up to $12 billion by 2024 even taking into account disruptions caused due to COVID-
19, according to the International Trade Centre’s latest export potential assessment for Pakistan.
As much as $7 billion of this untapped export potential is at risk, due to market frictions such as lack of
transparency and related non-tariff measures, especially for small businesses looking to trade more across
borders. Thus, identifying which non-tariff measures hinder Pakistani exports is critical for the Government
to better formulate its trade policies.
Supporting small businesses to achieve export success also requires a clear understanding of the challenges
they face. International Trade Centre business surveys on non-tariff measures aim to achieving exactly that
– identifying key trade hurdles through direct interaction with businesses.
This report is based on a large-scale business survey of exporters and importers in Pakistan. It identifies the
most challenging non-tariff measures that Pakistani businesses face. This gives policymakers insight into
which policies, procedures and facilities must be strengthened to reduce trade costs and boost
competitiveness.
More than half of the exporters in Pakistan face difficulties with restrictive regulations or related trade
obstacles. Among these are difficulties complying with technical requirements, lack of trade-related
information and inadequate domestic infrastructure.
Women entrepreneurs also face social constraints and a general lack of sufficient support in government
agencies and business support institutions.
Market access begins at home. There is great scope for the Government of Pakistan to streamline
processes, improve quality management and work with exporters to provide consistent, transparent and
timely information. This report supports that process, by providing the business voice on nationally relevant
priorities for competitiveness.
The International Trade Centre remains committed to supporting Pakistani small businesses to reach their
potential by overcoming those obstacles. I hope this report will help forge a roadmap that leads to more
inclusive and competitive trade policy.
The International Trade Centre has been pleased to work with the World Bank Group on this important
project to support the Government of Pakistan.
Dorothy Tembo
Acting Executive Director

International Trade Centre
iii
Foreword by the World Bank Group
Pakistan’s growth and development prospects are inextricably linked to its ability to better integrate into world
markets. For Pakistan, increased exports and integration into global value chains means more and better
jobs for its men and women.
Pakistan is at a crossroad. By its 100th birthday, it can become an upper-middle income economy and create
better opportunities for its people. To make this possible, Pakistan needs to act now to embrace the global
marketplace, jumping into a virtuous cycle of integration, job creation and sustainable growth. The right first
step is to identify obstacles to trade and design a roadmap for their reduction.
Non-tariff measures – often imposed to protect human, animal or plant health, to ensure quality or inform
consumers about production processes – can at times become obstacles to trade. Non-tariff measure
compliance may become too onerous for firms, and the mere process of finding the right information can be
cumbersome.
Taking stock of non-tariff measures affecting 1,152 Pakistani exporters and importers, this study –
commissioned to the International Trade Centre – contributes to evidence-based policymaking in Pakistan.
Focusing on those non-tariff measures concerning exporters, the study identifies those – foreign or
domestically imposed – that most affect exports and proposes a way forward. Conformity assessments
associated with testing and product certification are considered demanding by almost half of exporters – not
because of meeting the required criteria, but rather the high costs of proving it.
Providing information about what it takes to export a product to a given destination is very valuable for firms,
particularly for new, small exporters, that lack the scale to invest in information searching. Digital trade
portals, easily accessible to everyone regardless of location or gender, can be a step in making non-tariff
measures more transparent, and compliance with them less costly.
The World Bank Group is glad to be collaborating with the International Trade Centre in its commitment to
support the Government of Pakistan with efforts for a smart integration of its talent in the global economy.
Illango Patchamuthu
Country Director for Pakistan

World Bank Group
iv
Acknowledgements
The International Trade Centre (ITC) expresses its appreciation to the representatives of enterprises,
business associations and institutions, and the experts who agreed to be interviewed and shared their
experiences on regulatory and procedural trade obstacles.
Mohamed Tarek Issa and Samidh Shrestha wrote this report. Abdellatif Benzakri and Paula Andrea
Castaneda Verano contributed to data quality control and provided statistical support. Rao Mehroz Khan
provided research support.
ITC thanks Fayaz Rasool Maken (Federal Board of Revenue), Omer Mukhtar Tarar (Pakistan Council of
Scientific and Industrial Research), Roubina Shah (formerly Ministry of Commerce) and Shahrukh Iftikhar
(ABS & Co.) for their expertise and contributions to the report.
Samidh Shrestha managed the implementation of the business survey on non-tariff measures in Pakistan.
ITC acknowledges Gallup Pakistan, which conducted the interviews in Pakistan.
We thank the Ministry of Commerce of Pakistan for its trust and support throughout the project. We also
express our gratitude to Nadia Rocha, Gonzalo Varela and the World Bank team in Pakistan for their
guidance during survey implementation and feedback on the report.
The Non-Tariff Measures Business Survey in Pakistan was implemented as part of the ITC Programme on
Non-Tariff Measures under the general supervision of Mondher Mimouni, Chief, ITC Trade and Market
Analysis Section, and Ursula Hermelink, Manager of the ITC Programme on Non-Tariff Measures.
This report contributes to the development of a comprehensive Strategic Trade Policy Framework (STPF)
under the Pakistan Trade and Investment Policy Program (PTIPP) – a collaborative effort among the Ministry
of Commerce, the Australian Department of Foreign Affairs and Trade and the World Bank Group aimed at
increasing Pakistan’s share in regional trade and investment.
Special thanks to Jennifer Freedman for editing and content support, and to the ITC publications team for
production management and quality control.
ITC thanks the Australian Department of Foreign Affairs and Trade for their financial contribution.
v
Contents
About the paper ii

Foreword by the International Trade Centre iii
Foreword by the World Bank Group iv
Acknowledgements v
Acronyms ix
Executive summary x
Understanding non-tariff measures 1

A business survey on non-tariff measures 2
Pakistan’s economy: the big picture 3
CHAPTER 1 PROFILES OF SURVEYED COMPANIES 8
CHAPTER 2 THE COMPANY PERSPECTIVE 13
Common challenges 13
Both foreign and local regulations are burdensome 15
Proving compliance with technical requirements is hard 17
Technical requirements are demanding 18
Firms stumble over domestic regulations 19
Procedures cause serious problems 22
Business environment in Pakistan is challenging, but improving 23
Agricultural export challenges 25
Fresh fruits and vegetables 28
Live animals and meat products 29
Rice 31
Transport and documentation challenges are common 32
Administrative procedures and high fees: The real problem for food exporters 32
Manufacturing export challenges 33
Textiles and garments 36
Surgical instruments 37
Sports equipment 38
Pharmaceutical products 38
Manufacturing exporters face difficulties with rules of origin and other issues 38
Procedures are the main burden for manufacturing exporters 38
Importers struggle most with non-technical measures 39
What are the challenges of women entrepreneurs? 41
vi
CHAPTER 3 THE PUBLIC SECTOR 46
Pakistani trade laws and regulations 46

Pakistan Customs 49
Export-quality management and infrastructure 53
Availability of trade-related information 57
CHAPTER 4 RECOMMENDATIONS 62
Improve transparency in trade 62

Upgrade domestic quality infrastructure and compliance 63
Enhance customs infrastructure and procedures 65
Support women enterpreneurs on business and export development 66
APPENDICES 68
Appendix I Non-tariff measures surveys: global methodology 68
Appendix II Non-tariff measures classification 72
Appendix III Procedural obstacles 74
Appendix IV Project timeline and stakeholder consultation 75
Appendix V Laboratories in Pakistan for food testing 76
REFERENCES 81
ITC SERIES ON NON-TARIFF MEASURES 82
vii
Tables and figures
Table 1 Non-tariff measures affect Pakistani exports and imports 14

Table 2 Agricultural exports – non-tariff measures and why they are burdensome 27
Table 3 Manufactured exports – non-tariff measures and why they are burdensome 35
Table 4 Inspection bodies active in food and textile trade 54
Figure 1 Pakistan relies heavily on imports while its service sector continues to grow 3
Figure 2 EU is the biggest export market, textiles and cotton are the top exports 3
Figure 3 China and EU provide most Pakistani imports 4
Figure 4 EU offers the most duty-free access for Pakistani products 4
Figure 5 Clothing products and rice have the greatest export potential 5
Figure 6 United States, China and Germany are the most promising markets 5
Figure 7 Exporters in Pakistan, by sector and region 6
Figure 8 Pakistan and its Trade Facilitation Agreement commitments 7
Figure 9 Pakistan has signed several multilateral and bilateral trade agreements 7
Figure 10 The survey interviewed 1,152 Pakistani exporters and importers 8
Figure 11 Pakistani producers usually process their own exports 9
Figure 12 Most survey participants are small enterprises and based in Punjab and Sindh 10
Figure 13 The survey covered exporters from most sectors 10
Figure 14 Asia is the top market for most agriculture exporters and the EU for manufacture exporters 11
Figure 15 Pakistan has a low female employment rate and few women in key company positions 12
Figure 16 Fresh food exporters are most affected by non-tariff measures 14
Figure 17 Asia and Europe impose most of the challenging regulations 15
Figure 18 Exporters have the most trouble with conformity assessment and export-related measures 16
Figure 19 Export inspection is the leading domestic regulatory challenge for exporters 19
Figure 20 Procedures make compliance with regulations difficult for Pakistani exporters 22
Figure 21 Domestic procedures are the most troublesome 23
Figure 22 Traders view the business environment as not ideal, but improving 24
Figure 23 Conformity assessment is the biggest stumbling block for firms of all sizes 25
Figure 24 Firms face most difficulties exporting agricultural goods to the EU 26
Figure 25 Testing and certification requirements are tough for most produce exporters 28
Figure 26 Non-tariff measures hinder most live animal and meat exporters 30
Figure 27 Regulations and procedures hold back 55% of rice exporters 31
Figure 28 Domestic regulations are a big hurdle for manufacturing exporters of all sizes 33
Figure 29 Most difficult foreign regulations for manufacturing exporters originate in the EU 34
Figure 30 Domestic rules and procedures are the main problem for textile and garment exporters 37
Figure 31 Finance measures are the biggest challenge for Pakistani importers 39
Figure 32 Burdensome regulations affect more women-led exporters than men-led exporters 42
Figure 33 Most business associations are unhappy with progress on trade policy and agreements 48
Figure 34 Half of business associations are satisfied with improved customs procedures 52
Figure 35 Most business associations say availability of trade information has improved 61
viii
Acronyms
Unless otherwise specified, all references to dollars ($) are to United States dollars, and all references to
tons are to metric tons.
ANF Anti-Narcotics Force

DPP Department of Plant Protection
EU European Union
ISO International Standards Organization
ITC International Trade Centre
NTM Non-tariff measure
PO Procedural obstacle
PSQCA Pakistan Standards and Quality Control Authority
SAARC South Asian Association for Regional Cooperation
SBP State Bank of Pakistan
SME Small and medium-sized enterprise
SPS Sanitary and phytosanitary
TBT Technical barriers to trade
UNCTAD United Nations Conference on Trade and Development
WeBOC Web-based customs clearance system
WTO World Trade Organization
ix
Executive summary
One in two Pakistani exporters struggles with regulations

About half of the Pakistani exporters find it hard to comply with trade-related regulations or procedures in
Pakistan and abroad. Governments impose measures such as testing, certification and licensing to regulate
markets, protect their consumers and preserve their natural resources. Traders in developing and least
developed countries, in particular, have the most difficulty dealing with these non-tariff measures (NTMs).
The NTM Business Survey in Pakistan finds that 49% of small enterprises and 57% of medium-sized firms
have trouble with non-tariff measures, while 54% of large companies consider them to be burdensome.
Almost half of the challenges these firms reported stem from Pakistani rules on matters such as export
inspections, tax refunds and export certification.
These invisible barriers to trade affect exporters and importers differently, and their impact varies across
sectors. Regulations and the procedures to comply with them are difficult for 51% of Pakistani exporters and
46% of importers. Most agricultural exporters (60%) – especially those dealing with fresh and processed
foods – experience difficulties with these measures, as most countries have stringent regulations in place to
protect human health and the environment. In comparision, 47% of the Pakistani companies that export
manufactured goods face problems.
Conformity assessment is the top challenge

Technical measures are the main obstacle for exporters. Conformity assessment requirements such as
testing and product certification are a bigger concern (41%) than rules related to quality standards, safety
and production processes (4%).
In fact, Pakistani exporters say that high costs and administrative hurdles related to conformity assessment
mean it is actually tougher to prove compliance with regulations than to comply. This mirrors survey results
in other developing countries.
Issues such as the preshipment and border clearance procedures of partner countries, price-control
measures and rules of origin are relatively minor compared to the difficulties associated with conformity
assessment procedures, the survey finds.
Asian and European regulations are the most reported

Destination partners apply 55% of the measures that are troublesome for Pakistani exporters. Transit
countries apply less than 1%.
Almost 43% of the difficulties involve regulations of Asian countries (excluding the South Asian Association
for Regional Cooperation, or SAARC), and particularly Gulf Cooperation Council members. More than one-
third (36%) of burdensome foreign regulations are European. Pakistani exporters say complying with
European rules is difficult and the accompanying conformity assessment procedures are too strict. The
neighbouring SAARC countries account for only 5% of the problems that Pakistani exporters experience with
foreign regulations.
At the individual partner country level, the United Arab Emirates and the United Kingdom are responsible for
the most reported regulations, each accounting for 8%. German measures account for 6%, while Oman and
the United States account for 5% each.
Domestic regulations create obstacles

Pakistani regulations account for about 45% of the troublesome measures that exporters face. Most of these
involve export inspections (31%), tax refunds (27%) and export certification (10%). Pakistani policies cause
55% of the problems reported by exporters of manufactured goods, and one-third of the difficulties that
agriculture exporters experience. Large firms (52%) face more problems with domestic export regulations
than small and medium-sized businesses (45%).
x
Women-led enterprises are more affected

Women-led companies report the same sorts of trade-related hurdles as men-led companies, but the impact
on women-led companies is more severe. The survey also finds that, for various reasons, many women-led
enterprises in Pakistan have failed to export successfully.
Procedures are a major hurdle

The survey identifies the measures that affect exporters as well as the reasons they are burdensome.
Exporters often face difficulties with a regulation not only because it is too strict or complex, but also – and
at times solely – because of the steps they must take to comply with that regulation.
Pakistani exporters say the regulations are overly strict or compliance is difficult in just 12% of the cases. In
contrast, the procedures are the problem in 70% of the cases – and most of these occur in Pakistan itself.
The remaining 18% are difficult due to both the regulation itself and related procedures.
More than two-thirds of these obstacles occur in Pakistan. The most important ones are slow processes on
the necessary paperwork and high fees and charges to obtain required certification or testing. Informal
payments and inadequate facilities for testing and certification in Pakistan were also frequently reported.
The way forward: Quality infrastructure and compliance

The survey results and report recommendations aim to help the Government and businesses understand
the biggest problems facing Pakistani traders and tackle these issues. The survey identifies numerous
challenges, especially regarding export-quality management and infrastructure in the country. These must
be addressed to support private-sector development and to strengthen export competitiveness.
Improving quality infrastructure and enforcing quality compliance are key to export development. For
instance, Pakistan should increase the capacity of local laboratories to carry out required testing and
certification. Efforts need to be made to strengthen the capacity of small and medium-sized enterprises to
comply with international market access requirements.
The absence of proper warehouse and cold storage facilities at major borders points is a serious problem
that must be fixed. Trade procedures need to be streamlined and paperwork at government offices and
customs offices should be automated to reduce the administrative burdens and costs shouldered by
Pakistani exporters.
Exporters lack the resources and the skills to acquire and process trade-related information. Traders need
a proper portal that can provide reliable export- and import-related information. This portal should store
information about trade regulations and procedures, and provide facts about relevant agencies, port
authorities and customs.
Finally, Pakistani trade regulations and processes must be streamlined to facilitate exports. A policy rethink
is needed on advance payment restrictions on raw material imports and processes involving the duty
drawback scheme. Export inspection processes at the customs also should be improved.
Survey sample is representative of Pakistani traders

The results presented in this report are based on a large-scale business survey (See Appendix I) carried out
by the International Trade Centre in February–July 2019. The NTM Business Survey in Pakistan aims to
provide a better understanding of the hurdles that hold back exporters and importers, and to identify potential
bottlenecks related to trade procedures and cross-border operations. ITC interviewed 1,152 trading
companies in Pakistan, targeting active exporters.
The recommendations made in the report are based on consultations with relevant stakeholders and are in
line with ITC’s action plan aimed at supporting small businesses in developing countries affected by the
COVID-19 crisis.
xi
UNDERSTANDING NON-TARIFF MEASURES
Understanding non-tariff measures

No n-tariff measur es (NTMs) are ‘policy measures, other than
customsWhat tariffs, that can measures?
are non-tariff pot enti ally have an economic effect on
intern ational trade in goods, changing quantiti es traded, or prices
or both’. 1 The concept of NTMs is neutral and doe s not imply a
Non-tariff measures
direction of impact. (NTMs)
2 are ‘policy measures,
other than customs tariffs, that can potentially have
Being ‘defi ned
an economic byonwhat
effect they artrade
international e not’in3goods,
, these meas ures comprise
many
changing policies other
quantities than
traded, tariffs.
or prices They1 The
or both’. are complex legal texts
specific
concept of toNTMs
the isproduct anddoes
neutral and applying
not implycountry.
a They are mor e
diffic ult to quantif y orofco
direction mp are
impact. 2 t han t ariffs.
Being ‘defined by what they are not’,3 these

1234 measures comprise many policies other than tariffs.
They are complex legal texts specific to the product
and the applying country. They are more difficult to
quantify or compare than tariffs.
Classifying NTMs
Classifying NTMs
NTMs may be applied NTMsfor maylegitimat

be appliede for legitimateincluding
reasons, reasons, including
t he
protection of human,theanimalprotection
andof plant
human,health.
animal and
As plant
such,health.
this As
report does not make such,
a this reportent
judgem doeson not imake a judgement
ntentions or the on
legitimac y of a measure. intentions or the
By d esi gn, t helegitimacy
survey of a measure.
only c aptures
measur es that caus e diffi culti es for trading compani es. NTMs
By design,
anal ysed in this r eport refertheto survey only captures
‘burdensome measures
NTMs’. Becathat
usecause
difficultiesare
obst acles to trade for trading companies.
complex, und NTMs analysedtheir
erstanding in this report
terminol ogy and classification is refer to ‘burdensome
import ant. NTMs’.
The diversity of non- tariff meas ures

The diversity r equires
of non-tariff a cl assificati
measures requireson
a
system. ITC NTMclassification
sur veys ar e based on t he int ernational
system. ITC NTM surveys are based on the
classificati on developed by the
international Multi-Agency
classification Support
developed Team,
by the Multi-Agency
Support Team, incorporating minor adaptations to the
ITC NTM survey approach.4
Procedural obstacles and
the business environment
Procedural obstacles and business environment
Procedural
Proce obstacles refer
dural obstacles refe to practical
r to practical chall enges directly related to
challenges
the impleme directlyntation
related toofthe non-t
implementation
ariff measures. Examples include
of non-tariff
problems measures.
caused Examples
b y the l ack ofinclude
adequat e testing facilities to comply
problems caused
with t echnic al by the lack
m easur esoforadequate testing
exc essive paperwork in t he administration
facilities to comply with technical measures or
of lic ences.
excessive paperwork in the administration of
Inefficiencies inlicences.
the tr ade-related business environment may have
similar effects, but these are unrel ated to sp ecific NTMs. E xamples
include del ays
Inefficiencies and
in the costs duebusiness
trade-related to poor infrastructur e or inc onsistent
behaviour may
environment of officials at customs
have similar effects, butorthese
ports.
are unrelated to specific NTMs. For example
delays and costs due to poor infrastructure.
1
Multi-Agency Support Team (2009).
2
The term ‘non-tariff barrier’ implies a negative impact on trade. The Multi-Agency Support Team and the Group of Eminent Persons
on Non-Tariff Barriers proposed that non-tariff trade barriers be a subset of NTMs with a ‘protectionist or discriminatory intent’.
3
Deardorff and Stern (1998).
4
For further details on the Multi-Agency Support Team NTM classification, see Appendix II.
1
A BUSINESS SURVEY ON NON-TARIFF MEASURES
A business perspective is imperative

A business perspective is imperative
As exporters and importers deal with NTMs and other challenges firsthand, a
business perspective on these measures is indispensable. For governments,
understanding
The Int ernati onal Trade Centrthe main concerns
e (ITC), of companies
in collab orati on about non-tariff
wit h the W orld measures,
Bank, carriedprocedural
out the obstacles and trade-related
NTM Business Surve y business environments
in Pakistan in 2019.can The help define
survey seeks national strategies
to provide to overcome
a better undertrade
standingobstacles.
of th e trade obst acles
confr onti ng Pakistani c ompani es and t o identify potential bot tlenecks
The International Trade Centre (ITC), in collaboration with the World Bank,
relat ed t o tr ade procedur es and cross-bor der operations.
carried out the NTM Business Survey in Pakistan in 2019. The survey seeks to
As expor tersprovide a better
and impor understanding
ters de al with ofNTMs
the trade
andobstacles
other confronting
challengesPakistani
companies
firsthand, a business and to identify
perspective on potential bottlenecksisrelated
these measures indispe to nsable.
trade procedures
For and
governments, cross-border operations.
under standing the main conc erns of com panies about non-
tariff measur es, procedural obstacles and trade-relat ed business
Information obtained from the survey will help both the private sector and the
environments can hel p define national strategies to overcom e trade
Government create an enabling environment for private sector development and
obstacles.
improve the export competitiveness of Pakistan.
Infor mation obt ai ned from the survey will help both the private sector and
the Government cr eate an enabli ng envir onment for private sector
developm ent and improve the export com petitiveness of P akistan.
Methodology and survey implementation

Methodology and survey implementation
ITC adapted the general methodology of the survey to meet the needs and
requirements of Pakistan.5 ITC compiled a registry of more than 12,000 active
exporters in the country to determine the population size and to contact the
ITC adapted t companies.
he gener alAmet hodol ogy
stratified randomof the s urvey
sampling to m eet
method was the
usedneeds
to calculate the
and requirements of size
P akistan. 5 ITC compil ed a registry of mor e t han
sample for each sector. This approach ensures that survey results are
12,000 active representative
exp orters in bythe countr y to determine t he popul ation size
sector.
and to contact the compani es. A stratified random samplin g meth od w as
Interviews
used t o calc ulate with size
the sample Pakistani enterprises
for each sector. were held in February–July
This approach ensur es 2019.
that survey resAdditional
ults ar e interviews
representwereati vealso
by conducted
sect or. with representatives of various public
agencies and business associations.
Int ervi ews with P akist ani enterprises wer e hel d in February–July 2019.
Additional int erviews were also conducted with repres entatives of
various public agencies and busi ness associations.
Stakeholder consultations
Stakeholder consultations
56
ITC has also engaged bilaterally with representatives of public sector agencies
ITC, together and
wit hbusiness
the W associations,
orld Ba nk and as well the Mi nistry
as experts on of Commerce,
Pakistani trade policy, custom
organi zed the Nati onal Stak
procedures andeholder Meeting on Non-Tariff
quality infrastructure, Measures o n
to gain a comprehensive understanding
17 July 2019 i nNTM-related
Islamabadhurdlesto pres ent by
faced t he surveyand
exporters r esults to public
importers and
in the country.
private sector repres enati ves. 6
Furthermore, consultations were held with public and private sector
The meeting aimed to vali dat eduring
representatives t he results, stimulate
the National a public and
Stakeholder privat on
Meeting e Non-Tariff
sector dial ogue, a nd develop
Measures pr oposals
on 17 July 2019 in and polic y6 The
Islamabad. options to address
meeting aimed to validate the
the probl ems identified in the saurvey.
results, stimulate public and private sector dialogue, and develop proposals
ITC has also engaged bilat erallyaddress
and policy options to with reprthe esent
problems
ativesidentified in the sector
of public survey.
agencies and business associations,
Recommendations as inwell
presented this as experts
report on Pdrafted
have been akist ani
in consultation
trade policy, cust
withom procedures
relevant a nd
experts and quality i nfr astr ucture, to gai n a
stakeholders.
compr ehensive understandi ng NTM-relat ed hurdles fac ed by exporters
and importers in the country.
Rec ommendations presented in this report have been drafted in
consult ation with relevant exper ts and stakehol ders.
5
For details on the methodology, see Appendix I.
6
See agenda of the meeting in Appendix IV.
2
PAKISTAN’S ECONOMY: THE BIG PICTURE
Figure 1 Pakistan relies heavily on imports while its service sector continues to grow
Change in Pakistan’s sector composition (1960 – 2018) Pakistan’s export and import
figures in 2018
60
53%
55
Sector's contribution to GDP (%)
50
44%
45
40 36%
35
30
23%
25
20 15%
18%
Each dot represents $1 billion
15
10 Exports: $24 billion
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
Imports: $60 billion
Agriculture Industry Services
Source: World Development Indicators, World Bank (2019) and ITC Trade Map, 2018.
Figure 2 EU is the biggest export market, textiles and cotton are the top exports
Pakistan’s main export markets (2018) Pakistan’s top five export products (at HS-2 level)
$4.1
$3.5
$2.9
26% $2.6
34%
$2.3
4%
8%
12% 16%
Export value in $ billions
Textile articles; sets; worn clothing and worn textile

articles; rags (HS 63)
EU 28
Cotton (HS 52)
United States of America
Articles of apparel and clothing accessories,
SAARC knitted or crocheted (HS 61)
Articles of apparel and clothing accessories, not
China
knitted or crocheted (HS 62)
United Arab Emirates Cereals (HS 10)
Rest of the world
Source: ITC Trade Map, 2018.
3
Figure 3 China and EU provide most Pakistani imports
Pakistan’s main import markets (2018) Top five import products (at HS-2 level)
$17.2
25% 24%
4%
4% 14% $6.2
4% $4.3
4% $3.7 $2.8
5% 5% 10%
Import value in $ billions
Mineral fuels, mineral oils and products of their

China United Arab Emirates distillation (HS 27)
EU 28 Machinery, mechanical appliances, nuclear reactors,

Saudi Arabia
boilers; parts thereof (HS 84)
United States of America SAARC Electrical machinery and equipment and parts
thereof (HS 85)
Indonesia Qatar Iron and steel (HS 72)
Japan Rest of the world Organic chemicals (HS 29)
Source: ITC Trade Map, 2018.
Figure 4 EU offers the most duty-free access for Pakistani products

Diversification
Average MFN of Preference
Pakistan’s major 95% trade in Duty-free imports
traded tariff lines margin
export markets number of
(2018) HS-2 HS-6 Tariff lines Value
Simple Weighted Weighted
digit digit (% of total) (% of total)
Agricultural products
European Union 16 49 13.8% 10.4% 6.4% 62.8% 61.6%
Afghanistan 6 13 8.8% 6.8% 0.3% 0.0% 0.0%
United Arab Emirates 12 25 5.3% 0.6% 0.0% 33.7% 88.4%
Saudi Arabia 13 42 8.2% 2.0% 0.0% 29.0% 70.6%
China 8 10 17.4% 43.8% 2.6% 26.5% 9.6%
Non-agricultural products
European Union 27 229 4.9% 9.9% 9.8% 99.3% 99.8%
United States 24 118 6.6% 9.4% 0.4% 48.1% 17.6%
China 19 60 10.5% 5.6% 2.8% 38.0% 38.0%
United Arab Emirates 46 283 4.7% 3.2% 0.0% 5.9% 37.0%
India 17 42 11.4% 6.4% 1.6% 1.0% 22.3%
Source: World Tariff Profiles, World Trade Organization (2019).
4
Figure 5 Clothing products and rice have the greatest export potential
$.2.4 $6.5 Apparel
$1.6 $4.6 Textile fabrics
$1.3 $4.1 Home textiles
$0.9 $2.4 Rice

Top 10 products with most potential
in billions
$0.8 $1.7 Skins, leather and products thereof
The Export Potential indicates a
potential export value based on supply,
$1 $1.6 Fruits and vegetables demand and ease of trade
considerations.
$0.3 $0.7 Miscellaneous manufactured products The Untapped Potential signals room
for export growth if frictions, for
example in the form of regulatory or
$0.3 $0.5 Mineral products and electrical energy procedural obstacles can be overcome.
$0.4 $0.5 Fish and shellfish
$0.4 $0.5 Sugar
Source: ITC Export Potential Map, 2019.
Figure 6 United States, China and Germany are the most promising markets
$.1.3 $3.8 United States
$1.1 $2.5 China
$0.7 $1.9 Germany
$0.5 $1.6 United Kingdom Top 10 markets where Pakistan has

most export potential in billions
$0.4 $1.5 Afghanistan The Export Potential indicates a

potential export value based on supply,
demand and ease of trade
$0.4 $1.1 Spain considerations.
The Untapped Potential signals room

$0.4 $1 France for export growth if frictions, for
example in the form of regulatory or
procedural obstacles can be overcome.
$0.
$0.4 $0.9 Netherlands
3
$0.4 $0.8 Italy
$0.3 $0.8 United Arab Emirates
Source: ITC Export Potential Map, 2019.
5
Figure 7 Exporters in Pakistan, by sector and region
Most exporters are from the clothing and miscellaneous manufacturing sector
Wood, wood products

Fresh food and raw agro- and paper, 4% Leather and leather
based products, 7% products, 6%
Processed food and agro- Chemicals,
based products, 6% 5%
Metal and other basic
manufacturing, 9%
Electronic
components,
2%
Transport
equipment,
Non-electric 1%
machinery, 4%
Computer,
Yarn
telecommunications,
consumer electronics, <1%
Yarn, fabrics and Miscellaneous

textiles, 8% manufacturing, 21%
Minerals,
4%
Clothing, 23%
Exporters are largely based in Punjab and Sindh
Azad Jammu and Kashmir

324
6 Gilgit-Baltistan
115
Khyber Pakhtunkhwa
7484 Islamabad Capital Territory
Punjab
101 Balochistan
Sindh
3152
Note: The boundaries and names shown and the designations used on this map do not imply official endorsement or acceptance
by the United Nations..
Source: Based on a registry of exporters compiled by ITC. Company information was sourced from Trade Development Authority of
Pakistan, various business associations and chambers of commerce.
6
Figure 8 Pakistan and its Trade Facilitation Agreement commitments
Category A Provisions that Pakistan has implemented when the agreement

entered into force
26%
Category B Provisions that Pakistan has committed to implement following
a transitional period – latest by July 2023.
43%
Pakistan’s
Notification Status Category C Provisions that Pakistan has committed to implement following
a transitional period – latest by July 2023 – and requiring
31% technical assistance mainly in upgrading the ICT infrastructure
and capacity building of its staff.
Pakistan OCT The Trade FEB Pakistan has

ratified the Facilitation implemented
Trade
Facilitation 27 Agreement
entered into 22 163 out of 238
commitments
69%
Agreement 2015 force 2017
Source: WTO Trade Facilitation Agreement Database, March 2020.
Figure 9 Pakistan has signed several multilateral and bilateral trade agreements
Bilateral free trade agreements
China
Malaysia
Sri Lanka
Bilateral partial trade agreements Afghanistan
Indonesia Nepal
Iran Bhutan
Pakistan
Mauritius
Ongoing bilateral trade agreement India

negotiations
Bangladesh
Afghanistan
Bosnia and Herzegovina
Egypt
Laos
Mexico Ongoing plurilateral trade
Republic of Korea agreement negotiations Sri Lanka
Singapore
Serbia Gulf Cooperation Council (GCC)
Thailand Maldives
Southern Common Market (MERCOSUR)
Turkey Organisation of Islamic Cooperation (OIC)
Yemen Association of Southeast Asian Nations (ASEAN)
Note: To the best of ITC’s knowledge, this figure reflects the situation as of September 2019. The number and list of products for
which preferences are granted varies from country/territory to country/territory. Only agreements with reciprocal preferences are
shown. Pakistan may be granted preferential tariffs resulting from trade regimes such as the Generalized System of Preferences, i.e.
from countries providing non-reciprocal preferential tariffs to developing and least developed countries.
The boundaries and names shown and the designations used on this map do not imply official endorsement or acceptance by the
United Nations.
Source: ITC Market Access Map, 2019.
7
CHAPTER 1 PROFILES OF SURVEYED COMPANIES
© istock
Focus on exporters
ITC interviewed companies in Pakistan in a two-stage process:
Telephone Interviews Face-to-face interviews
The first step involves short telephone Companies facing obstacles due to
interviews designed to confirm the non-tariff measures are invited to
main sector of activity, direction of participate in detailed face-to-face
trade and whether the company has interviews. During these interviews,
experienced difficulties with non-tariff they are asked for details about of the
measures. types and causes of the regulatory
NTM-related problems they face.
Companies interviewed in the phone
screening phase are selected based A total of 301 companies affected by
on stratified random sampling. A total measures that they considered
of 1,152 firms were interviewed in this burdensome participated in these
phase. interviews (Figure 10).
Figure 10 The survey interviewed 1,152 Pakistani exporters and importers
Types of companies interviewed

765 244 143
Stage 1:
Telephone interviews
171 90 40
1152
Stage 2:
Face-to-face interviews
Companies
interviewed
Exporters Both exporters and importers Importers
Source: ITC NTM Business Survey in Pakistan, 2019.
8
The NTM Business Survey sought to uncover export bottlenecks, and its results are representative of the
export sector. However, as many exporters rely on imports of intermediate inputs, companies were also
asked about their importing activities and difficulties, if any. Only a small percentage of randomly selected
companies were exclusively importers.
ITC interviewed 1,152 trading enterprises in Pakistan, of which 66% were exporters, almost 13% were
importers and 21% were involved in both exporting and importing (Figure 10).
Pakistani exporters tend to be producers

Most of the surveyed companies identify themselves as producers (78%); they either manufacture the goods
they export or at least contribute some value addition (Figure 11). Some 22% of the exporters are traders,
sourcing goods from other Pakistani producers and exporting them to foreign buyers without any value
addition.
Exporters handle their own export processes

More than three-quarters of Pakistani enterprises can manage the export process without the support of a
specialized forwarding company. However, 11% rely on specialized forwarding companies and 5% entrust
exporting activities to their partners abroad (Figure 11).
Figure 11 Pakistani producers usually process their own exports
Share of companies that produce goods that they export Entity in charge of the companies’ export process
Specialized forwarding
company
11%
Both the company and the

7%
specialized forwarding
78% company
The company itself

76%
Partner company
abroad
22% 5%
Unspecified
Most exporters are small or medium-sized firms

Most survey respondents were small enterprises (61%), followed by medium-sized firms (19%) and large
companies (9%) (Figure 12). The classification of companies according to size is based only on the number
of employees. Companies with 50 or fewer employees are classified as small, 7 those with 51–250 employees
are classified as medium-sized, and businesses with more than 250 employees are classified as large.
Survey covers companies located across Pakistan

The NTM Business Survey has wide geographic coverage, including more than 20 cities or towns and the
surrounding region. Most of the surveyed companies are based in Lahore and the surrounding area in Punjab
province (Figure 12).
7
In 2016, the State Bank of Pakistan decided to redefine the size of small and medium-sized enterprises. For small companies, the
upper limit of employees increased from 20 to 50 employees. A medium-sized enterprise is a business entity with 51–250 employees
in the manufacturing and service sectors.
9
The survey covers companies located in the following cities: Bahawalpur, Faisalabad, Jhang, Gujrat,
Gujranwala, Lahore, Multan, Rawalpindi, Sahiwal, Sargodha, Sheikhupura, Sialkot (Punjab province);
Karachi, Khairpur and Sukkur (Sindh province); Lasbela and Quetta (Baluchistan province); Peshawar
(Khyber Pakhtunkhwa) and Islamabad.
Figure 12 Most survey participants are small enterprises and based in Punjab and Sindh
Size of interviewed companies Location of interviewed companies
Azad Jammu and Kashmir
Gilgit-Baltistan
Khyber Pakhtunkhwa
61% Small
19% Medium Islamabad Capital Territory
9% Large Punjab
11% Unspecified
Balochistan
Sindh
Survey includes exporters in most sectors8

Well over two-thirds of the surveyed enterprises export manufactured goods. The largest groups export
clothing (19%), yarn, fabrics and textiles (14%), leather and leather products (8%), chemicals (5%), and
miscellaneous and other manufacturing products (9%).
Figure 13 The survey covered exporters from most sectors
About a third of the surveyed exporters (31%) operate in the agricultural sector (Figure 13). These include
exporters of fresh food and raw agro-based products (21%), such as fresh vegetables and fruits, nuts, honey,
dairy and meat, as well as exporters of processed food and agro-based products (10%).
8
ITC categorizes the surveyed companies in two broad sectors (agriculture and manufacturing) and a further 13 subsectors – based
on the main export of each company.
10
Asia and Europe are the main markets for most exporters 9
The key markets for Pakistani agricultural and manufacturing exports differ significantly. Asia (excluding the
SAARC region) is the main destination market for 51% of agricultural exporters, followed by the SAARC
region (22%) and Europe (19%) (Figure 14). On the other hand, Europe is the main market for 44% of
surveyed manufactured goods exporters, followed by Asia (24%) and SAARC (13%).
Figure 14 Asia is the top market for most agriculture exporters and the EU for manufacture exporters
Main markets for exporters of agriculture products
51%
Asia
(ex. SAARC)
19%
22%
Europe
North 2% SAARC
America Australia and
1% Africa Oceania
1%
Main markets for exporters of manufactured products
44% Asia
(ex. SAARC)
Europe 24%
13% Australia and
North 2% Oceania
SAARC
America
2% Africa
11%
9
During the initial telephone interviews, companies are asked to identify their main export market (region) based on the value of their
sales. In the subsequent face-to-face interviews (where companies report difficulties with non-tariff measures), firms are asked to
identify the destination markets (country level) for each of their export products (at HS-6 digit level). In addition, they are asked if they
have faced any regulatory or procedural obstacles to trade when exporting each of their goods to their corresponding market(s).
11
Female employment in Pakistani companies is low

On average, 4% of the workers employed by the surveyed companies are women (Figure 15). More than
half (60%) of the companies have no female workers, while 80% had less than 10% female employees. Less
than 1% of the companies employed more women than men.
There are some variations across companies of different sizes. Medium-sized and large firms tend to employ
a larger proportion of women, 8% and 13% respectively, compared with small enterprises (2%).
Men owned or managed 86% of the surveyed companies; only 9% were headed by women. These firms are
managed by a woman (4%), owned by a woman (4%) or both (less than 1%).
Figure 15 Pakistan has a low female employment rate and few women in key company positions
Share of female employees across companies Share of women-led companies

of different sizes
Large
13%
Medium
8%
Small
2%
Average Each dot represents a percentage point
4%
Managed by women Owned by women
Owned and managed by men Unspecified
Source: ITC calculations based on NTM Business Survey in Pakistan, 2019.
12
CHAPTER 2 THE COMPANY PERSPECTIVE
© Shutterstock
Common challenges
Non-tariff measures affect most exporters
More than half of the surveyed companies said they had faced
restrictive regulations or related obstacles to trade in Pakistan or
abroad when exporting. These difficulties related to their current
experiences or experiences in the past year.
51%
Exporters
Companies may find compliance with any given non-tariff measure
difficult for various reasons. The conditions of a regulation may be
overly complex or trade-restrictive – for instance, businesses may be
unable to export due to export prohibitions or because they are
unable to meet high-quality requirements. Share of exporters affected by NTMs
Furthermore, exporters may struggle with a particular regulation

because of the related procedural obstacles. These obstacles can
arise in Pakistan, in transit countries or in destination countries,
irrespective of which country applies the measure. NTMs are official
regulations applied by the authorities in the exporting or importing
country, while procedural obstacles are problems that firms face due
to the way the regulations are implemented. Exporters from agriculture sector affected
Non-tariff measures also affect importers

These regulations affect importers and exporters differently, and
their impact varies across different sectors in Pakistan. The share of
affected companies is higher among exporters than importers, for
example. About 46% of importers have experienced regulatory or
procedural obstacles (Table 1). Most of these companies import
goods for further processing rather than direct sales. Exporters from manufacturing sector affected
13
Table 1 Non-tariff measures affect Pakistani exports and imports
Pakistan’s export Sector's share in Number of Share of companies

Company
Sector or import value in total exports or surveyed facing difficulties with
type
2018 ($ '000) imports companies1/ NTMs
Agri-food 5,045,064 22% 315 60%

Exporters Manufacturing 17,701,113 78% 694 47%
Subtotal 22,746,177 100% 1,009 51%
Agri-food 7,515,607 18% 42 45%
Importers Manufacturing 33,305,021 82% 345 46%
Subtotal 40,820,628 100% 387 46%
Total 1,152 50%
Note: 1/ A total of 244 surveyed firms were involved in both exporting and importing. These companies were interviewed separately
about each activity and are included separately in the count for exporters and importers. The total of exporting and importing companies
(1,152) represents the number of individual companies interviewed rather than the sum of the subtotals in the table (1,396).
Source: ITC Trade Map, 2018, and ITC NTM Business Survey in Pakistan, 2019.
Companies in the agriculture sector are more affected

While onerous regulations and procedures cause problems for 47% of exporters in the manufacturing sector,
the rate exceeds 60% among agricultural exporters. Those that export fresh and processed food are
particularly affected. In general, these products are highly regulated to protect human health and the
environment.
Figure 16 Fresh food exporters are most affected by non-tariff measures
Share of exporters affected by non-tariff measures across different sectors
Fresh food and raw agro-based products

63%
Processed food and agro-based products
52%
Textile products
51%
Clothing
50%
Leather goods
44%
Roughly 63% of fresh food exporters and 52% of processed food exporters said they faced burdensome
regulations (Figure 16). Sanitary and phytosanitary (SPS) measures and related certification or control
procedures especially affect agri-food products, which tend to be highly perishable and fragile. Most
countries are very vigilant about consumer safety and strongly emphasize food controls.
In the manufacturing sector, burdensome measures affect 51% of textile exporters, 50% of clothing exporters
and 44% of leather product exporters.
Companies of all sizes are affected

Half of small firms, 57% of medium-sized enterprises and 54% of large companies reported difficulties with
regulations. For a small firm, the burden of tackling a non-tariff measure or procedural obstacle in one or
more of its few markets can be huge. In contrast, a more diversified, large company can compensate for
difficulties in some markets by doing more business in others. Smaller companies also struggle more than
larger enterprises to bear the costs of complying with regulations.
14
Both foreign and local regulations are burdensome

More than half (55%) of the challenging measures reported Share of the reported burdensome NTMs that
by exporters are regulations of partner (importing) countries. are applied by partner countries and Pakistan
The rest are Pakistani regulations pertaining to exports. Less
than 1% of the reported hurdles are transit country Foreign
regulations
regulations.
NTM survey results in Pakistan differ substantially from those

of other countries that ITC surveyed in the Asian region. In 55% 45%
Pakistan, almost half of the reported non-tariff barriers stem
from domestic regulations. In other Asian countries, only 20%
of the troublesome NTMs are related to domestic Pakistani
regulations.10 regulations
Asian and European countries account for most onerous NTMs

Countries in Asia and Europe impose most of the foreign regulations that Pakistani traders perceive as
difficult. Asian countries (excluding the SAARC region) are responsible for 43% of the foreign measures
reported by survey respondents. Most of these originate in the United Arab Emirates (8%), Saudi Arabia
(6%) and Oman (5%) (Figure 17).
European countries account for 36% of burdensome foreign regulations. Most of these come from the United
Kingdom (8%), Germany (6%), Italy (4%) and the Russian Federation (4%). Exporters from developing
countries struggle to comply with European Union (EU) regulations – particularly SPS and quality
requirements – and consider the accompanying conformity assessment procedures to be overly strict.
Countries in the neighbouring SAARC region and the United States each account for 5% of the reported
difficulties with foreign regulations.
Figure 17 Asia and Europe impose most of the challenging regulations
Share of troublesome regulations applied by partners, by region and country
50% 43%
40% 36%
30%
20%
9% 7%
10% 5%
0%
SAARC Asia Europe North America Rest of the world
10% 8% 8%
8% 6%
6%
5% 5%
6% 4% 4% 4% 4%
4% 3% 3% 3% 3%
2% 2% 2% 2%
2% 1% 1% 1%
0%
10
Company perspectives on non-tariff measuresin Asia-Pacific (2019). ITC publication (forthcoming).
15
Technical regulations hinder Pakistani firms in all sectors

Technical measures include
Technical regulations, which include technical requirements
and related conformity assessment measures, account for
the largest share (45%) of the measures that hinder
Conformity assessment
These regulations are the top concern in both the Procedures such as
agricultural and the manufacturing sectors. Difficult certification that prove
conformity assessment requirements such as testing and compliance with
underlying
product certification (41%) trouble Pakistani exporters more Technical requirements
technical
than technical requirements (4%). requirements. Product specifications related
to quality standards, safety,
In fact, exporters find it harder to prove compliance with the production processes and
sanitary requirements. They
regulations than to comply with them, usually due to high are usually implemented to
costs and administrative hurdles related to the conformity protect consumers, animal
assessment. health or the environment, or
for national security.
Difficulties with conformity assessment are more
pronounced among agricultural exporters (59%) than
exporters of manufactured products (27%).
Figure 18 Exporters have the most trouble with conformity assessment and export-related measures
Types of non-tariff measures Pakistani exporters find burdensome
Technical requirements
4%
Preshipment inspection and border clearance
Quantity-control measures
45% Charges, taxes and price-control measures
41%
Finance measures
Anti-competitive measures
Distribution restrictions
3% 3%
Rules/Certificate of origin
Export-related measures
All sectors
3% 4%
33% 27%
55%
59% 6%
1% 4%
Agriculture Manufacturing
16
Pakistani exporters also find it hard to comply with other regulations, such as preshipment inspection and
entry formalities as well as finance and price-control measures. Preshipment inspections and border
clearance present more of a hindrance to the manufacturing sector (6%) than to the agriculture sector (1%).
Problems with rules of origin or obtaining a certificate of origin are minimal (1%), and are mainly reported by
exporters of manufactured goods. The main concern of Pakistani exporters vis-à-vis rules of origin and the
related certificate is the lack of adequate information.
Proving compliance with technical requirements is hard

Conformity assessment requirements make up 41% of
reported NTM cases, which include difficulties with What are conformity assessment
product certification and testing obligations. Factors requirements?
such as limited infrastructure and lack of well-trained
staff have contributed to compliance problems in The World Trade Organization Agreement on
Pakistan. Technical Barriers to Trade defines conformity
assessment as ‘any procedure used, directly and
Most of these requirements, which aim to ensure quality indirectly, to determine that relevant requirements
in technical regulations or standards are fulfilled’.
or safety, are imposed by European countries (33%),
These requirements include procedures for
followed by Saudi Arabia (7%) and Oman (6%). sampling, testing and inspection; evaluation,
verification and assurance of conformity; and
More than half of the burdensome technical regulations registration, accreditation and approvals (ITC,
reported in the survey pertain to quality and safety 2005).
certificates for fresh fruits and vegetables. Pakistani
exporters also find it difficult to obtain certifications such Exporters must present a certificate of conformity of
as AZO-free dyes (carpets) and OEKO-TEX, SA8000 their goods, a mark on the product label or both.
and BSCI (textiles and garments). National standards bodies, trade and industry
associations, or third-party certification bodies
Concerns about conformity assessment include the usually issue the certifications. Though the
importing country requires the certification, it may
inability of Pakistani laboratories to do the necessary
be issued either in the exporting or the importing
testing and issue the required certificates, and the fact country.
that certificates issued by Pakistani public institutions
are not recognized internationally. As a result, many In the context of the NTM survey, the term
exporters use laboratories in other countries, leading to ‘conformity assessment’ is also used for procedures
longer processing times and higher costs. to prove compliance with SPS measures
Pakistani laboratories provide testing services on few

products with limited parameters because of weak
Conformity assessment requirements
infrastructure and insufficient capacity. 11 are the most reported type of non-tariff
measure among Pakistani exporters.
Moreover, strict traceability requirements mean meat
exporters are unable to access the EU and the US
markets. European countries and the United States Problems satisfying testing and
require the disclosure of information on all stages of certification requirements comprise
production, which may include locations and the 41% of the reported NTMs.
processing methods and/or equipment and materials
used.
Exporters see certification as a cost, not an investment

Companies tend to consider quality certification, inspections and testing as a cost, rather than an investment
for their products to compete internationally.
A lack of awareness about the benefits and necessity of such conformity assessment is one reason for such
sentiments. This could be addressed through trainings and seminars to build the capacity of the private
sector.
11
More information on accredited laboratories in Pakistan is available in Chapter 3.
17
Another reason exporters are reluctant to become certified is the additional efforts and costs involved. The
limited number of conformity assessment laboratories in Pakistan means the costs and time involved in
sending samples for testing are a hindrance to some companies. A few labs do offer collection and return
services, but these come with a premium attached.
Certification from an accredited laboratory is essential

In an effort to minimize costs, some exporters have relied on companies that deliver subpar services or are
not accredited. It is vital for firms to be aware of the quality of service that is offered. Many private labs in
Pakistan are incapable of delivering proper quality control and testing, but they offer low-cost certification.
On multiple occasions, exporters have obtained quality and safety certification for their products from
laboratories at a relatively low cost, but these labs were neither registered nor accredited. As a result,
customs rejected the consignments for failing quality-control tests.
The Pakistan National Accreditation Council accredits labs and certification bodies in Pakistan. Exporters
must be diligent and verify that the certifying body from which they receive a certificate is accredited.
Several internationally recognized laboratories providing good-quality services also operate in Pakistan.
Although they charge more than other private and public labs (because of their investments in infrastructure
and training for their personnel), their certifications are recognized and accepted globally.
Information on export-quality management is inadequate

Some of the difficulties that exporters experience with conformity assessment are due to the lack of reliable
information about the requirements and procedures. There are two national enquiry points in Pakistan – one
each for issues related to technical barriers to trade (TBT) and SPS.
The Ministry of Commerce has designated the Pakistan Standards and Quality Control Authority (PSQCA)
as the TBT enquiry point. It provides information on the regulations of other countries, assists exporters, and
provides information about accredited labs and certification bodies, and government-registered inspection
agencies.
However, there is no easily accessible and updated information portal for all relevant information that an
exporter would need. The website of the Small and Medium Enterprises Development Authority (SMEDA)
does mention a procedure, but it is obsolete. Most websites for government departments are also outdated.
No information is available on what tests should be taken, what laboratories or certification authorities exist,
or the procedures or fees associated with these requirements.
Technical requirements are demanding

The main concern of exporters (17%) about technical
requirements is the obligation to heat products below or What are technical requirements?
above certain temperatures for a certain period of time
to kill target pests either before or upon arrival at the
destination country. Most problems with this measure Technical requirements are product-specific
involve EU (71%) and Canadian (29%) requirements. properties that define the characteristics and
The strict rules applied by destination markets create technical specifications of a product or the
major barriers for Pakistani exports. production process and post-production treatment.
They are legally binding and set by the destination
or origin country. Technical requirements include
Other technical requirements that hold back Pakistani
mandatory administrative provisions.
exporters involve the restricted or prohibited use of
certain substances (15%), production processes (15%) Many of these measures protect consumers – for
and product quality or performance (12%). example, from health or safety risks – as well as
plants, animals, the environment or the national
Insufficient fumigation and irradiation facilities in security of a country. Technical requirements
Pakistan also hinder exporters, particularly those that include sanitary and phytosanitary measures
designed to safeguard human, animal and plant life
ship foods such as fruit and vegetables. Fumigation is a
and health from pests and diseases.
process of exposing insects, fungal spores or other
organisms to lethal chemical fumes. Irradiation is a
requirement to kill or weaken microorganisms, bacteria,
viruses or insects that might be present in food and feed
products by using irradiated energy (ionizing radiation).
18
Difficulties with rules of origin and preshipment inspection

Pakistani exporters experience few difficulties related to rules of origin or the process of obtaining certificates
of origin. These issues account for only 2% of the NTM cases reported by exporters of manufactured goods
and less than 1% of the cases reported by exporters of agricultural products.
Various chambers of commerce around the country issue certificates of origin. To obtain the certificates,
exporters must be a member of the chamber and submit documents including shipment details. The chamber
usually does not cross-check the documents or the products before issuing certificates.
Manufacturing sector exporters struggle more with preshipment inspection and border clearance procedures
(6%) than exporters of agricultural products (1%). The preshipment-related challenges are attributed to slow
processing and the arbitrary behaviour of customs officials in destination countries.
Firms stumble over domestic regulations

Roughly, 45% of the difficulties that Pakistani exporters face are related to domestic regulations. Among
these ‘export-related measures’, the most frequently mentioned are export inspection (31%), tax refunds
related to exports (27%) and export certification (10%).
The manufacturing sector in particular associate many of its difficulties on Pakistani regulations (55%). This
compares with 33% in the agriculture sector. Similarly, large firms face more challenges with domestic
regulations (52%) than small and medium-sized exporters (45%).
Similar to the measures applied by destination markets, compliance with Pakistani regulations is deemed
burdensome mainly because of the associated procedures.
Figure 19 Export inspection is the leading domestic regulatory challenge for exporters
Types of domestic regulations exporters find burdensome
Other export-related measures 31% Export

Export taxes and charges, export price 26% inspection
control measures, measures on re-
export, customs formalities, constraints
in receiving payments
26%
Export quantitative restrictions

Export prohibitions and quotas,
6%
Licensing or permit to export, export
registration
Export
27% tax refund
Certification required by
exporting country
10%
19
Export inspections have caused delays and damage

Exporters consider Pakistani inspection requirements and customs clearance to be burdensome. The most
common problems during export are the arbitrary behaviour of customs officers, reckless handling of goods
and unnecessary delays during inspection, demands for informal payments and the need to submit a large
number of different documents.
The biggest problem with export inspections is the long waiting time, according to exporters (in 33% of the
cases). Exporters face a one-week delay on average if their goods are inspected, though delays of several
weeks have also been reported. As a result, some exporters missed their booked cargo vessels and had to
make alternative arrangements for shipments.
Furthermore, demurrage and additional expenses due to delays are costly for exporters. In about 30% the
cases, exporters said the export inspection process is burdensome because of the high costs they incur.
A lack of scanners and proper facilities such as cold storage, as well as too few workers at various public
agencies, also make inspection procedures difficult for exporters.
Exporters also frequently report damages to their products or its packaging that occur during export
inspection. Exporters often only discover the damage when their goods reach buyers. While exporters
understand that some packages have to be opened during inspections, they are unhappy that the products
are not properly repacked. Exporters say they should be allowed to make sure their goods are repacked
properly before being shipped to buyers.
The Pakistani Anti-Narcotics Force (ANF) inspects goods to combat money laundering and drug trade. About
2% of all shipments are checked, according to ANF. The authorities plan to install large scanners to avoid
the problems that occur during manual inspection.
Finance restrictions create obstacles

Payment constraints imposed by the State Bank of Pakistan (SBP) hamper many companies. For instance,
a ban on advance payments impairs Pakistani exporters using imported raw materials in their production
(see section on Importers’ difficulties for details about payment restrictions).
Companies also say Pakistani banks are inefficient. It is difficult to track payments from abroad, and after a
bank receives the money, there is a long process to release the payment. Moreover, exporters consider the
regulations of Pakistani banks to be burdensome. To release a payment, an exporter must provide many
documents to its bank, including all relevant details of the transaction.
Waiting times for tax rebates are long

The duty drawback scheme has been applied to various commodities in Pakistan since the 1960s. More
recently, the Government began offering incentives to stimulate exports of textiles 12 and other manufactured
goods.13 Other financial incentives aim to boost exports of processed agricultural products. 14
The current duty drawback schemes are under:

 Notification No 1(42-B)TID/18-TR II Duty drawback Order 2018-21 for garments, home textiles and
processed fabrics.
 S.R.O., 7ll(l)/2018. Local taxes and Levies Drawback (Non-Textile) order, 2018-21.
However, exporters find the duty drawback process to be redundant, complicated and time-consuming. The
most commonly reported issue is the slow rebate process. Many refunds have been held up for years, which
has affected the liquidity of Pakistani companies.
The procedure to file claims is complicated and much of the information that is demanded is unavailable
when the claim is filed. In addition, many public agencies, such as the Ministry of Commerce and the Federal
12
See http://www.sbp.org.pk/epd/2018/FECL21-Annex-B.pdf
13
See http://www.commerce.gov.pk/wp-content/uploads/pdf/SRO-582.pdf
14
See http://www.commerce.gov.pk/wp-content/uploads/pdf/SRO_581_2016.pdf
20
Bureau of Revenue, are involved in the process. This makes it difficult to follow up and get updates about
the status of refunds. Exporters said the tax rebate system should be more transparent.
Trade associations have no role in the current schemes, resulting in additional hurdles for claimant.
Previously, associations were responsible for verifying claims before they were submitted to SBP. Now, all
claims go to SBP through local banks, which are not capable of validating the documents before they are
forwarded. This has caused delays in processing, and claims are sometimes rejected.
In addition, budgetary constraints in Pakistan have hindered payments to traders under the duty drawbacks
schemes.
Pakistan has several export prohibitions and price-control measures

Pakistan allows exports of all items except those mentioned in Schedules I-IV of the Export Policy Order. 15
To ensure enough domestic supply, many food products (such as white sugar, chickpeas, green beans and
lentils) cannot be exported at any given time.
Additionally, kinnows and mangoes are subject to seasonal bans. Kinnows cannot be exported before 1
December and mango exports are only allowed after 20 May. Furthermore, mangoes can only be shipped
to European countries, Canada, Iran, China, Kuwait and Bahrain by air and in standardized packaging.
Rice exports must meet quality conditions set by the Trade Development Authority of Pakistan. However,
exporters say these conditions are not transparent. Additionally, exports can be prohibited without prior
notice or a reason for the ban.
Pakistan forbids all exports to Israel and restricts exports of certain products to other countries. For instance,
under the Afghanistan–Pakistan Transit Trade Agreement, vegetable ghee, cooking oil, cigarettes, dyes and
cotton yarn cannot be shipped to Afghanistan. Onion exports to India are only allowed through the Wagah
border.
Furthermore, more than 20 items are subject to a minimum export price in US dollars. This mainly covers
surgical instruments such as tooth extraction forceps and several types of scissors. Exporters complain that
these price-control measures disadvantage their goods vis-à-vis those of foreign competitors.
National Logistics Cell is a dominant player in Pakistan’s freight transportation

Road transport is crucial in Pakistan, accounting for 94% of freight traffic. 16 However, some companies say
the National Logistics Cell (NLC) does not provide enough trucks and containers. Exporters report long
delays to transport their goods, which damages their business. To avoid long waiting times, many companies
use trucks provided by the private sector.
The Pakistani trucking industry is deregulated and there are no official restrictions on the use of private
sector trucks.17 In practice, however, NLC benefits from favourable market conditions. NLC operates dry
ports and border terminals across Pakistan and is also responsible for collecting tolls on major highways. 18
Furthermore, for goods transit under the Afghan Transit Treaty, the Pakistan Government has chosen NLC
as the sole Pakistani trucking company to handle transport domestically. 19
15
See https://www.tdap.gov.pk/pdf/EPO_2015-18.pdf
16
See https://www.pc.gov.pk/uploads/plans/Ch27-Transport-logistics2.pdf
17
See http://www.engineeringpakistan.com/EngPak1/trucking/EXECUTIVE%20SUMMARY.pdf
18
See http://nlc.com.pk/strategic-units/dry-ports-borders
19
ITC (2015). Road freight transport sector and emerging competitive dynamics.
21
Procedures cause serious problems

Regulations that are overly strict or demanding cause
12% of the problems that exporters face. By contrast, 70% What are procedural obstacles?
of NTMs are onerous only because of the related
procedures. Both regulatory and procedural obstacles
account for the remaining 18% of the difficulties that To provide a better understanding of the nature of
exporters experience (Figure 20). These POs occur both problems faced by exporters, the NTM survey
at home and in destination countries. methodology identifies the measures that are
burdensome to exporters as well as the underlying
reasons they are burdensome.
Slow procedures are the top impediment for exporters
(Figure 21). Delays account for 30% of the reported POs, Exporters often find it difficult to comply with a
while 28% are caused by high fees and charges to obtain particular regulation not only because it is too strict
the required certification or testing. or complex, but also (and at times solely) because
of the related procedures.
Most difficulties related to high fees and charges occur
abroad. This is due largely to the lack of appropriate Non-tariff measures are official regulations applied
facilities for testing and certification in Pakistan. Exporters by the competent authorities in the exporting or
must send their goods to other countries for testing, and importing country, and traders must comply with
they pay high fees for these services. them. Procedural obstacles are hurdles that
companies face due to the way a regulation is
applied or implemented.
The third biggest PO is informal payments to get
paperwork issued, clear shipments or expedite the
process (11%).
More than 90% of informal payments involve Pakistani agencies, with the rest demanded by customs officials
in destination markets or transit countries, notably Afghanistan and India. Exporters also reported conformity
assessment obstacles caused by inadequate facilities in Pakistan. Domestic facilities lack international
accreditation, which means partner countries often reject certification by these agencies.
Figure 20 Procedures make compliance with regulations difficult for Pakistani exporters
NTMs and POs Procedural obstacles

Both regulatory and procedural obstacles make compliance with
make compliance with NTMs difficult NTMs difficult.
18% 70%
Regulatory obstacles
Regulations are too strict
or difficult to comply with Reasons exporters experience difficulty
12% complying with non-tariff measures
Source: ITC NTM Survey in Pakistan, 2019.
22
Figure 21 Domestic procedures are the most troublesome
Types of procedural obstacles exporters face in Pakistan and abroad
Delay related to reported regulation
High fees and charges
Informal payment
Other limited or inappropriate facilities
Limited or inappropriate facilities for testing
Information not adequately published and disseminated
Arbitrary behaviour of officials
Large number of different documents
Other procedural obstacles
0 100 200 300 400 500

Number of procedural obstacle cases reported by exporters
Location where the exporters Pakistan Partner country

face the obstacles
Business environment in Pakistan is challenging, but improving

Surveyed companies identified challenges in the domestic trade-related business environment. Inefficiencies
in the business environment are generic problems unrelated to specific regulations, but they affect the ability
of enterprises to export or import.
Firms were asked to identify factors that made it difficult for them to conduct business and how these
conditions had changed in the last five years.
The main concern about the business environment is time delays, identified by 86% of surveyed companies
(Figure 22). Corruption and arbitrary behaviour (84%) and limited or costly airline transportation (81%) are
their second- and third-biggest criticisms of the trade-related business environment.
Most firms also consider the clearance mechanism in Pakistan to be complicated. The majority of
respondents believe that problems with limited or extremely expensive airline transportation and the lack of
inputs for production have become worse in the past five years.
Nevertheless, the survey also reveals some encouraging results. For instance, 83% of the enterprises
reported that computerized procedures had become better and 74% noted improvements in other
technological constraints (Figure 22). More than two-thirds (69%) of interviewed companies agreed that
electricity supply had been upgraded over the past five years.
23
Figure 22 Traders view the business environment as not ideal, but improving
Share of companies whose business is negatively Company perceptions on how the business environment in
affected by the current business environment Pakistan has changed in the last five years
83% 13% 4%
67%
74% 19% 7%
71%
69% 17% 14%

77%
60% 27% 13%

68%
52% 29% 19%

81%
51% 28% 21%

78%
42% 45% 13%

71%
39% 40% 22%

66%
35% 40% 25%

81%
34% 40% 26%

73%
30% 54% 17%

55%
30% 55% 15%

77%
27% 50% 23%

79%
27% 46% 28%

86%
26% 53% 21%

75%
26% 40% 34%

84%
23% 36% 41%

78%
16% 66% 19%

73%
14% 69% 18%

65%
13% 18% 69%

81%
Share of companies negatively affected by current

% Improved Remained the same Deteriorated
business environment conditions in Pakistan
24
Agricultural export challenges

The agricultural sector employs 42% of the working population of Pakistan and contributes 23% to gross
domestic product.20 Pakistani agri-food exports were valued at $5 billion in 2018. 21 The biggest markets for
these exports were Afghanistan (17%), the United Arab Emirates (8%), China (6%) and Indonesia (5%).
Cereals (46%), sugar and sugar confectionery (10%), fish (9%) and fruit and nuts (8%) are the main exports.
Most agri-food exporters face hurdles

ITC interviewed 315 exporters of agricultural products, most of which were small or medium-sized
businesses. The agriculture sector comprises two subsectors: raw agri-food products and processed food
products. Trade obstacles affect more than half of the companies that export both fresh food and raw agro-
based products (63%) and processed food (52%).
SMEs and large companies in Pakistan face similar problems (Figure 23). More than half of the reported
cases involved conformity assessment. Exporters of fruits, vegetables, meat and rice reported the most
difficulties with technical measures. Pakistani exporters are worried about their ability to prove compliance
with EU technical requirements on agricultural products.
The most frequently reported conformity assessment problems are testing and product certification
requirements. Many of these measures are deemed burdensome due to associated procedures, including
the absence of appropriate laboratories, time delays, a lack of international recognition and high fees and
charges.
Figure 23 Conformity assessment is the biggest stumbling block for firms of all sizes
Types of measures affecting agricultural exporters, by firm size
4%
26%
35%
9%
56% 66%
Large
SMEs
Technical requirements Conformity assessment
Preshipment inspection and other entry formalities Quantity-control measures
Charges, taxes and price-control measures Anti-competitive measures
Distribution restrictions Export-related measures
20
World Development Indicators, World Bank (2019).
21
ITC Trade Map (2019).
25
Small and medium-sized firms tend to struggle more with technical requirements than larger companies.
Large enterprises report more problems with regulations related to charges, taxes and price controls than
SMEs. Measures that Pakistan applies on exports account for roughly one-third of total cases, mostly
involving inspections and export tax refunds.
European markets pose the most problems

EU countries – particularly the United Kingdom and Germany – impose the most regulations on Pakistani
agricultural goods, according to exporters. Although the EU imports just 9% of Pakistan’s agricultural exports,
it is responsible for 21% of all measures that were reported. The majority of these pertain to strict rules on
food safety and related conformity assessments.
Similarly, the share of regulations originating in the United Arab Emirates and Saudi Arabia is higher than
the share of Pakistani exports to these countries. For instance, 8% of the exports are destined for the United
Arab Emirates, which accounts for 12% of the measures that are deemed burdensome (Figure 24).
In contrast, SAARC countries apply just 5% of the burdensome regulations, though these markets buy
around 24% of Pakistani agricultural exports. Likewise, China accounts for 6% of these exports, but applies
just 3% of the onerous measures.
Figure 24 Firms face most difficulties exporting agricultural goods to the EU
Shares of agricultural exports and measures applied by partner countries, 2019
21%
EU 28
9%
12%
United Arab Emirates
8%
10%
Saudi Arabia
4%
5%
SAARC
24%
3%
China
6%
7%
Indonesia
5%
Share of burdensome NTMs Share of Pakistan’s agriculture

originating from the destination exports to that region
market
Sources: ITC NTM Survey in the Pakistan, 2019; and ITC Trade Map, 2018.
26
Table 2 Agricultural exports – non-tariff measures and why they are burdensome
Number of cases reported for each measure type POs making the measure difficult
and the reason it is burdensome and where they occur
Measures are
and POs are

too strict or
Both NTMs
procedural
obstacles
Type of procedural obstacles
NTM type
difficult
difficult
faced (POs)
Due to
Limited or inappropriate facilities 7 7
High fees and charges 4 1 5
Technical requirements 7 10
Delay related to reported regulation 3 3
Informal payments 1 1
Informal payments 77 6 83
Conformity assessment 2 244 36 Limited or inappropriate facilities 79 2 81
Delay related to reported regulation 70 10 80
Other procedural obstacles 51 1 52
Arbitrary behaviour of officials 1 1
Preshipment inspection and
3 1 1 High fees and charges 1 1
border clearance
Others 1 1
Quantity-control measures 3
High fees and charges 3 3

Charges, taxes and price-
2 3 1 Delay related to reported regulation 3 3
control measures
Arbitrary behaviour of officials 1 1
Anti-competitive measures 1 Limited or inappropriate facilities 1 1
Others 1 1
Distribution restrictions 8 Delay related to reported regulation 8 8

Export-related measures 30 104 24
Limited or inappropriate facilities 40 40
Others 54 3 57
Total 47 370 63 622 36 658
27
Fresh fruits and vegetables

The main horticulture exports of Pakistan include
potatoes, dates, mangoes and kinnows. India,
Afghanistan, the Russian Federation and the
United Arab Emirates are among the major
destination markets. Between July 2018 and
February 2019, Pakistani fruit and vegetable
exports were worth $479 million. 22
About 62% of the fresh fruit and vegetable

exporters that participated in the survey said they
had experienced difficulties with non-tariff
measures, especially conformity assessment
requirements (Figure 25). © Shutterstock
Testing and certification: A problem of time and cost

Pakistani fresh fruit and vegetables must be tested and certified according to the requirements of importing
countries. For most exporters, the biggest problems are the time and costs they must invest to obtain the
required quality and safety certificates.
For instance, exporters find the process of obtaining phytosanitary certificates difficult because of slow
processing. The Department of Plant Protection (DPP) issues phytosanitary certificates following field
inspections by its officers to verify the quality of the products. Waiting times are long because DPP does not
have enough officers. Indeed, interviewed companies said field visits can be delayed by several weeks. In
addition, DPP officers sometimes demand informal payments to speed up the process.
Testing for maximum residue limits, carried out by the Pakistan Council of Scientific and Industrial Research,
also presents problems for exporters. It can take several days to issue the certificate, during which the quality
of the exports often deteriorates. Furthermore, the high fees for this testing are a real burden – for small
exporters in particular – especially when the importing countries require certificates for each container.
Figure 25 Testing and certification requirements are tough for most produce exporters
Types of procedural
obstacle exporters face
5%
21% Unusually high fees
62% Types of NTMs

exporters find
Time delays
Informal payment
Affected exporters burdensome
Inappopriate facilities
72% Other obstacles
0 50 100
Number of procedural obstacle cases
Share of exporters Technical requirements
experiencing difficulties Conformity assessment
complying with NTMs Preshipment inspection and other entry formalities
Where the exporters face the obstacles
Pakistan Partner country
Source: ITC NTM Survey Pakistan, 2019.
22
See https://www.dawn.com/news/1476106
28
Many exporters also expressed concern about the inadequate export-quality infrastructure in Pakistan. For
instance, importing countries require fresh fruit from Pakistan to be treated with hot water to reduce pest or
disease infestation. However, few facilities in the country can provide this kind of treatment, and their fees
are usually high.
Interviewed companies also mentioned a shortage of facilities offering fumigation and irradiation treatment
required by destination markets. One mango exporter said that only one plant in Multan provided irradiation
services, which leads to major delays.
Manual inspection and lack of cold storage create problems

Customs officials check goods manually because they lack suitable scanners. Manual inspections take a lot
of time, which affects the quality of highly perishable fruits and vegetables. In addition, the Anti-Narcotics
Force may also check the products. Many exporters have had to pay extra demurrage costs because AFN
inspections led to more delays.
Many exporters reported that their shipments were damaged by reckless handling during inspection. Some
also remarked that the product packaging was opened for the inspection, but not properly closed. This
increases the chance of goods being damaged during transport and displeases buyers, who do not want
damaged products or opened packages.
Another problem identified by fruit and vegetable exporters is the lack of sufficient cold storage at the main
border points. Several said they used their own diesel-powered refrigerated containers, which is a financial
burden that narrows their profit margins.
Conditions are attached to the duty-free import of corrugated boxes

Pakistan allows exporters of fruit and vegetables to import corrugated boxes without any duty or taxes,
provided they are used within 12 months. Companies that fail to meet this requirement are subject to duties.
However, as the kinnow and mango seasons are short, some of the boxes may not be used, resulting in
additional costs for exporters. Exporters said this 12-month period should be extended to 24 months so they
can use all the boxes they import without having to pay duties.
Live animals and meat products

Pakistani live animal and meat exports are
valued at $237 million. Meat exports have grown
markedly, increasing from $80 million in 2009 to
$227 million in 2018, with a peak of $263 million
in 2015.23
Almost 90% of live animal exports from Pakistan

are destined for Afghanistan ($8.5 million). But
Middle Eastern countries are the main importers
of Pakistani meat – notably the United Arab
Emirates ($91 million), Saudi Arabia ($37 million)
and Kuwait ($36 million).
Yet exporters of Pakistani meat products face

many challenges due to the absence of modern © Shutterstock
meat-processing facilities. Most of the
burdensome regulations reported by exporters in the survey relate to conformity assessments required by
importing countries (51%), followed by export-related measures (49%). Almost 72% of meat exporters are
affected (Figure 26).
Testing for antibiotic residues

Many meat exporters reported facing difficulties involving antibiotic residue testing. They said Pakistani
laboratories are either incapable of testing all the required parameters of various antibiotic residues or the
23
ITC Trade Map, 2018.
29
tests results are unreliable. As a result, high antibiotic residues in their goods have resulted in unpleasant
experiences and reputational loss.
Halal certification
Exporting to Gulf Cooperation Council countries and other Islamic countries requires a halal certificate. The
halal certification agencies in Pakistan are fragmented, and companies said they had difficulties providing
the required certificate.
In 2015, the Government decided to establish the Pakistan Halal Authority to promote halal exports.
However, this agency is not yet fully functional.24 Additionally, different importing markets ask for a distinct
halal certificate, which imposes an extra burden on the exporter to acquire several halal certificates.
Strict traceability requirements

The lack of a traceability mechanism is also a problem for Pakistani exporters. Markets including the EU and
the United States require traceability of livestock and meat products to ensure their quality. The fragmented
nature of the sector, together with insufficient monitoring and recordkeeping, makes traceability very difficult
in Pakistan.
Pakistani certificates lack international recognition

The Animal Quarantine Department is responsible for animal quarantine services in Pakistan. An
understaffed workforce and inadequate facilities at the agency have caused significant delays for exporters.
Additionally, only a few neighbouring countries accept the health certificate issued by the agency. Canada
and Saudi Arabia, for instance, refuse to recognize the certificate. As a result, exporters face additional costs
to bring technical experts from abroad to Pakistan to visit slaughterhouses and assess production methods.
Lack of sufficient cold storage facilities at major border points

Exporters voiced some concerns about the lack of adequate cold storage facilities in airports and at customs
points. They believe infrastructure deficiencies have affected the quality of Pakistan meat exports.
Figure 26 Non-tariff measures hinder most live animal and meat exporters
Types of procedural
Limited facilities
72% 49%
Types of NTMs
exporters find 51%
Limited transport and storage
Unusually high fees

Affected exporters burdensome
Time delays
Other obstacles
0 50
Share of exporters
experiencing difficulties Conformity assessment Where the exporters face the obstacles
complying with NTMs
Export-related measures Pakistan Partner country
Source: ITC NTM Business Survey Pakistan, 2019.
24
See https://tribune.com.pk/story/1946296/2-imrans-govt-concerned-delay-making-halal-authority-functional/
30
Mandatory export form and financial regulations create problems

Meat exporters said they struggled to complete the mandatory export form, called the ‘E-form’. When filling
in prices on the E-form, exporters must stick to the government-set export price. They cannot choose their
own export price for their meat, even if the importing country is willing to pay more. This means exporters
are losing profit.
The strict financial regulations imposed by the State Bank of Pakistan are another challenge for meat
exporters. For instance, if the value of the shipment declared on the E-form (prior to shipment arrival) does
not match the actual value, the company must amend the E-form – something exporters described as a
lengthy and complex process.
Rice
Pakistan was one of the top five rice exporters in
the world in 2018. Rice exports were valued at
about $2 billion that year, accounting for roughly
40% of total agri-food exports. Kenya, China and
Afghanistan are the main destination markets for
Pakistani rice.
Overall, 55% of the surveyed rice exporters

experience difficulties with NTMs (Figure 27). Most
of these involve conformity assessment rules,
particularly the high cost of certification.
Testing and certification requirements

© Shutterstock
One of the main obstacles that rice exporters face
is testing for maximum residue limits. Some countries require analysis within parameters not covered by the
Pakistan Council of Scientific and Industrial Research. As a result, exporters often send samples abroad for
testing – usually to the EU or the United States – which means longer processing times and higher costs.
Rice exporters also noted a scarcity of suitable labs to carry out the testing for genetically modified organisms
required by importing countries.
Figure 27 Regulations and procedures hold back 55% of rice exporters
Types of procedural
6%
Unusually high fees
55% 44% Types of NTMs

exporters find
Time constraints
Lack of sector-specific
Affected exporters burdensome facilities
46%
Lack of
recognition/accreditation
Other obstacles
0 10 20 30
experiencing difficulties
complying with NTMs Conformity assessment Where the exporters face the obstacles
Preshipment inspection and entry formalities
Charges, taxes and price-control measures Pakistan Partner country
Source: ITC NTM Business Survey Pakistan, 2019.
31
Exporters have also faced several problems at the destination markets due to the lack of recognition of
quality and safety certificates issued by Pakistani labs. When exporting to the EU, rice exporters face
challenges in showing that their product is pesticide free, because the tests done in Pakistan are not
recognized. In China, Pakistani rice usually must undergo an additional test to show that it complies with the
requirements.
Export inspection
More than 25% of the regulations that rice exporters find burdensome are linked to export inspection.
Companies expressed concerns about difficulties in the shipping process due to long waiting times (up to 10
days) caused by inspections. Additionally, rice exporters feel their goods are vulnerable to damage during
inspections. Some said their buyers had received torn bags or damaged rice shipments. Exporters
understand that their consignments may have to be opened for inspections, but they want all opened bags
to be properly repacked and sealed before they are shipped.
E-form and banking regulations are taxing

Like meat exporters, companies that export rice describe the E-form as complicated. Normally, SBP asks
exporters to submit many documents together with the form. The authorities are also slow in processing the
E-form, they said.
Rice exporters are very concerned about the strict regulations of SBP. If the name of the buyer on the order
form and the payment paperwork is not identical (orders sometimes come from one company and the
payment via its sister or subsidiary company), rice exporters cannot get the necessary export clearance.
They face the same problem if the actual payment amount differs from the estimated amount on the E-form.
Transport and documentation challenges are common

Agri-food exporters encountered problems with transport of their shipments. Most commercial freight is
transported by road, but the National Logistics Cell trucks and the containers are inadequate. This leads to
significant delays, which is a serious problem when exporting perishable goods. Only small quantities are
shipped by air because of the high cost for exporters.
Additionally, companies face difficulties exporting to Middle Eastern and North African countries, especially
Bahrain, the United Arab Emirates and Qatar, because additional documentation is required. For each
shipment, the embassies of these countries must review and verify all export documents. This bureaucratic
procedure adds to the costs and waiting time of Pakistani exporters.
Many constraints must be addressed at the production level. High production costs in Pakistan hamper
exporters. The spread of plant diseases such as fruit fly and thrips, water shortages and unavailability of
quality seeds are among the main concerns of agri-food exporters. Insufficient information on demand in the
international markets, in addition to packing and branding problems, hinder Pakistani exports. The lack of
modern technology also limits export quality.
Administrative procedures and high fees: The real problem for food exporters
Procedures are the biggest impediment to agricultural exports. Even with some of the most frequently
reported non-tariff measures, such as technical regulations and conformity assessment, the real problem
lies with delays in administrative procedures and high fees, both at home and abroad.
More than 77% of the measures reported by agri-food exporters are deemed burdensome, in part due to
procedures. The large majority of these hurdles (90%) result from Pakistani policies.
Most of the reported obstacles (26%) involve high fees and charges for essential export services, such as
testing and certification. The current state of the export-quality management system in Pakistan is a major
hindrance for agri-food exporters.
Unaccredited laboratories and the refusal of other countries to recognize certificates issued by Pakistani labs
are frequently reported problems. While exporters usually avoid these hurdles by sending product samples
to laboratories abroad for testing or certification, they find this to be expensive and time-consuming. The
32
process would be faster and cheaper if the necessary testing and certifications could be done in Pakistani
laboratories.
Most procedural obstacles in Pakistan occur at customs, mainly due to the inspections carried out by the
Anti-Narcotics Force. Many difficulties related to testing and certification take place at DPP and the Animal
Quarantine Department, which is attached to the Ministry of National Food Security and Research.
Manufacturing export challenges

Role of the sector
The manufacturing sector accounts for approximately 12% of Pakistani gross domestic product and employs
35% of the labour force.25 Pakistani exports of manufactured goods were worth close to $17 billion in 2018,
led by apparel and clothing accessories, (31%), textiles (23%) and cotton (20%). The United States, the EU
and China are among the major markets for Pakistani manufactured goods.
Almost half of exporters face difficulties with regulations

Of the 694 exporters surveyed from the manufacturing sector, almost half (47%) face difficulties with non-
tariff measures and related procedures. The most affected are exporters of goods such as textiles (51%),
clothing (50%) and leather products (44%).
Figure 28 Domestic regulations are a big hurdle for manufacturing exporters of all sizes
Types of measures affecting manufacturing exporters, by company size
7%
4%
22%
27%
53%
67%
6%
4%
Large
SMEs
Charges, taxes and price-control measures Finance measures
Rules of origin and related certificate of origin Export-related measures
25
World Development Indicators, World Bank (2019).
33
The import regulations of partner countries cause about 45% of the reported obstacles. Pakistani export
policies are the main concern of the manufacturing sector, accounting for more than half of reported
regulations (Figure 28). Other measures that affect exporters – albeit on a small scale – include preshipment
inspection and other entry formalities (6%), technical requirements (4%) and price controls (4%).
Partner country regulations burden Pakistani exporters

EU countries import the most manufactured goods from Pakistan (39%). They also apply most of the
burdensome regulations (41%) (Figure 29). German and British regulations are deemed the most
burdensome. Access to Canada and Australia also appears to be difficult, as the share of measures imposed
by these two countries exceeds their portion of imports.
In contrast, the United States buys 21% of Pakistani exports and accounts for just 9% of the measures that
are considered onerous. Similarly, SAARC countries import 8% of Pakistani manufactured goods while
accounting for only 6% of the troublesome regulations.
Figure 29 Most difficult foreign regulations for manufacturing exporters originate in the EU
Shares of manufactured goods exports and measures applied by partner countries
41%
EU 28
39%
5%
China
8%
3%
Canada
1%
9%
United States of America
21%
2%
Australia
1%
6%
SAARC
8%
3%
United Arab Emirates
2%
Share of burdensome NTMs Share of Pakistan’s manufactured

originating in the destination exports from that market
market
Sources: ITC NTM Survey in Pakistan, 2019, and ITC Trade Map, 2018.
Proof of compliance poses the biggest challenge

The NTM survey suggests that exporters of manufactured products find it more difficult to prove compliance
with technical regulations – through inspection, testing and certification (27%) – than to meet the technical
requirements themselves (4%). Exporters have the hardest time proving compliance with EU regulations,
followed by US and Chinese rules.
Exporters said most of the problems with conformity assessments are due to the related procedures(84%).
In Pakistan, the biggest obstacles in this respect are the lack of international accreditation at laboratories,
the refusal of foreign authorities to accept certificates issued in Pakistan and limited testing facilities. High
fees and long waiting times are the most common procedural hurdles that exporters face in other countries.
34
Table 3 Manufactured exports – non-tariff measures and why they are burdensome
Number of cases reported for each measure type POs making the measure difficult
and the reason it is burdensome and where they occur
Type of procedural obstacles

NTM type
faced (POs)

Technical requirements 20 2 2 High fees and charges 3 3
Other procedural obstacles 3 3
Conformity assessment 130 25
Limited/inappropriate facilities 60 60
Others 13 13 26
Preshipment inspection
1 20 12 Delay related to reported regulation 21 21
and border clearance
Others 14 14
Quantity-control measures 1 6
Charges, taxes and price-
20 3 High fees and charges 3 3
control measures
Informal payments 3 3
Finance measures 3 1 6 High fees and charges 3 3
Information is not adequately
12 12
Rules/certificate of origin 12 published
Export-related measures 38 207 75
Informal payments 43 3 46
Other procedural obstacles 90 90
Total 82 372 129 604 165 769
35
Textiles and garments

About 52% of Pakistani textile and garment
exporters face difficulties with NTMs. The main
challenges involve the conformity assessment
rules of partner countries (25%), followed by tax
refunds related to exports (21%) and inspections
imposed by Pakistan (14%).
Testing and certification requirements

Limited or unsuitable testing facilities and high
fees to have goods tested and certified abroad are
the main difficulties for Pakistani exporters. For
instance, exporters of gloves and towels said they
must have certifications such as the OCO © Shutterstock
certificate, SA 1400 and BSCI to enter the EU
market. Normally, only private labs that are internationally accredited – such as SGS and Bureau Veritas –
issue these certificates. Exporters consider the costs for these certifications to be high, especially as they
are only valid for a year.
For certain products, testing is required on blast, elongation, strength, puncture, resistance and cut level for
fibre. Exporters engage companies such as SDFI of the United States and Ricotest of EU for such tests,
which they find expensive.
Another commonly reported issue by exporters of readymade garments is the requirement of the EU and
the United States for clothes to be free from harmful chemicals. Exporters consider the charges to obtain
this kind of certificate, which is required for each container, to be high.
Pakistani producers normally use traditional dyes to manufacture carpets. However, to access the EU
market, carpets must be manufactured using AZO-free dyes. Many Pakistani exporters indicated that while
AZO-free dyes are becoming more available in the country, they are not yet readily accessible. Similarly,
other partner countries such as Japan and the Russian Federation require the use of new environmentally
friendly dyes that are iodized free. These dyes are not available in Pakistan, and importing them is costly.
The requirements of some buyers for compliance with various private standards are also onerous, according
to exporters of readymade garments. Some European buyers oblige exporters to provide a GOTS certificate
to ensure that the production process complies with social, ethical and environmental norms. Exporters get
this certificate from the United States, as no Pakistani agencies issue it.
Preshipment inspections causes delays

Exporters encounter unnecessary delays during customs inspections in several destination countries. These
hurdles arise in Canada, Italy and the United States due to the arbitrary behaviour of customs officials and
a lack of information about the documents required by these markets. Additionally, Pakistani exporters of
handmade carpets face high customs surcharges in China, despite the free trade agreement signed between
the two countries.
Domestic regulations and procedures hinder exporters

Pakistani authorities applied 54% of the burdensome measures reported by textile and garment exporters.
High costs, delays and administrative procedures related to export subsidies, tax refunds and export
inspections make these domestic regulations challenging, they said.
Garment and textile exporters echoed the concerns of agri-food exporters about export inspections carried
out by ANF. Their main complaint was that improper handling of goods led to delays and product damage.
The inspection can take at least two days, meaning exporters must bear extra demurrage costs and risk
missing the booked vessel.
Furthermore, ANF officials typically check consignments manually by unpacking the products. Exporters
usually are not allowed to repack their products after the inspection. Foreign buyers have frequently
complained that the goods are damaged or some pieces are missing.
36
Carpet exporters also said it was hard to send samples abroad because Pakistan restricts their weight to
12kg. Handmade carpets are usually heavy, and exporters said they had to pay extra fees for heavier
samples.
Tax refunds can be delayed for years

Exporters raised several concerns about the export incentive system in Pakistan. The information on the
different incentives is not properly published and many documents are required to benefit from these
incentives, they said. Even after the paperwork is submitted, there are significant delays before the incentives
are granted. Some exporters said they had been waiting several years to get tax refunds, and several had
made informal payments to government officials to expedite the process.
Exporters of readymade garments said many buyers in Canada and some European countries prefer to
transfer funds through an online system such as PayPal. But these online payment systems are prohibited
in Pakistan, so exporters are losing potential clients.
Figure 30 Domestic rules and procedures are the main problem for textile and garment exporters
Types of procedural
7%
Time delays
52% 54%
Types of NTMs
exporters find
burdensome
25% Unusually high fees
Lack of facilities
Affected exporters
Informal payment
8%
Other obstacles
0 10 20 30 40 50
experiencing difficulties Where the exporters face the obstacles
complying with NTMs Preshipment inspection and entry formalities
Quantity-control measures Pakistan Partner country
Charges, taxes and price-control measures
Finance measures
Export related measures
Surgical instruments
Conformity assessment requirements including the high fees and delays associated with the certification
required by destination markets are behind 59% of the burdensome measures described by exporters of
surgical instruments. Surgical instruments destined for European countries must have MDR certification, but
as no facilities in Pakistan can issue such certification, exporters invite foreign experts for field visits to obtain
it. This is a lengthy process, and exporters find the associated costs high. They face similar issues obtaining
US Food and Drug Administration, ISO 9001 and I.C.E. certifications requested by importing countries.
Surgical instrument exporters also experience difficulties with ANF export inspections and the strict financial
regulations imposed by SBP. Additionally, they complained about having to pay duties to reimport their
products if they are returned by foreign buyers.
37
Sports equipment
Conformity assessment requirements are the main technical issues for firms that export sports equipment.
This is largely due to the lack of international recognition of the tests performed and certificates issued by
public labs in Pakistan. In Australia, cricket bats must undergo an additional fumigation treatment, leading to
additional costs for Pakistani exporters.
Exporters of boxing equipment say they encounter long inspection processes and high customs surcharges
in Kazakhstan, Kyrgyzstan and the Russian Federation. Meanwhile, cricket bat exporters say Bangladeshi
customs values their products at more than the actual price, which means they must pay higher duties.
Difficulties with domestic regulations are mostly linked to the lengthy and complex process of the tax rebate
system in Pakistan. Inspections by ANF are also challenging for exporters of sports equipment.
Pharmaceutical products
Most of the difficulties that pharmaceutical exporters encounter are linked to product certification required by
importing countries or Pakistan. Some drug exporters cannot meet the strict technical requirement of foreign
markets.
Exporting to the United States and the United Kingdom requires FDA certification of conformity, but there
are no internationally recognized facilities in Pakistan that can provide this certificate. Similarly, exporters
report that Qatar and the United Arab Emirates do not recognize the certificates issued in Pakistan.
To export medicines and lifesaving drugs from Pakistan, exporters must obtain a No Objection Certificate
from the Drug Regulatory Authority. Pakistani companies find it difficult to get this certificate because the
agency demands a large number of documents.
Likewise, these exporters must obtain a Good Manufacturing Practice certificate from the Drug Regulatory
Authority. They need to supply many documents and inspectors from the agency must visit the production
site before issuing the certificate. This process can take up to three months.
Pharmaceutical exporters consider the export inspections carried out by ANF and the strict regulations of
SBP to be major hindrances.
Manufacturing exporters face difficulties with rules of origin and other issues
Exporting to or transiting in Afghanistan is difficult, Pakistani companies say, primarily because of slow
clearance processes, demands for bribes and arbitrary decisions by Afghani customs officials. Pakistani
trucks transporting goods in Afghanistan also face restrictions. For example, consignments must be
offloaded and reloaded onto Afghani trucks at the border points. Given the tense relationship between India
and Pakistan, exporters face similar challenges in India.
Despite the free trade agreement between Pakistan and China, Pakistani exporters encounter obstacles in
China. The arbitrary behaviour of Chinese customs officials means local certificates might be refused, even
if they are issued by a recognized private laboratory. Exporters also believe they face a longer inspection
process in China than traders from other countries. Furthermore, exporters say many Pakistani goods are
excluded from the trade agreement, which means they are subject to high Chinese custom duties.
Rules of origin are a bigger problem for exporters of manufactured goods than for agri-food exporters. Some
exporters acknowledged that they were unfamiliar with the requirements of importing countries and the
documents they demand. As a result, they usually discover at the border of destination markets that they
lack a valid certificate of origin. This causes long delays and, sometimes, the consignment cannot be cleared.
Procedures are the main burden for manufacturing exporters

As is the case with agricultural goods, it is often not the regulation per se that is burdensome for exporters
of manufactured products, but the accompanying procedures. About 64% of the regulations that were
identified as onerous were perceived as such because of the procedures.
38
Most of these procedural problems occur in Pakistan (79%). The most commonly reported obstacles are
delays (37%), high fees for certification and testing (30%), informal payments (8%) and lack of testing and
sector-specific facilities (9%).
In foreign countries, the most frequently mentioned procedures are high and informal payments for
certificates (60%) and delays (25%). Like exporters in the agricultural sector, companies that export
manufactured goods must turn to foreign countries for tests and certification because the facilities in Pakistan
are inappropriate or insufficient. This has led to increased costs.
Importers struggle most with non-technical measures

A total of 387 importers participated in the NTM survey. More than 90% of the burdensome measures they
face are non-technical. The top challenges for importers are finance measures (38%), charges and taxes
(30%) and preshipment inspection (18%).
Figure 31 Finance measures are the biggest challenge for Pakistani importers
Types burdensome non-tariff measures importers face
Other measures
7%
38% Finance
measures 3%
Conformity
assessment 5%
Inspection and
border clearance 18%
measures
29% Charges, taxes and

price-control
measures
Payment rules constrain importers

Restrictions on advance payments26 have a serious impact on Pakistani importers, who say SBP is
inconsistent on advance payments. Foreign Exchange Manual – 2018 dispensed with the facility of advance
payment against imports under letter of credit.27 Subsequently, in September 2018, 28 SBP allowed advance
payments of up to $50,00029 for imports of life-saving medicines or devices. 30
As per the latest regulation of January 2019, SBP decided 31 to let authorized dealers effect advance
payments of up to $10,000 per invoice, on behalf of importers cum exporters, for imports of raw materials
26
See http://www.sbp.org.pk/epd/2018/FEC6.htm
27
Para 30 (i), Chapter 13 of Foreign Exchange Manual – 2018.
28
Through EPD Circular Letter No. 15 dated September 14, 2018
29
Advance payment of $50,000 or equivalent per invoice.
30
However, the limit for imports against advance payment or on open account basis for essential medicines and devices remained the
same ($10,000 per invoice).
31
Circular letter No. 1 of 2019 dated 1 January 2019.
39
and spare parts. For down payments against machinery imports, SBP has allowed up to 20% under the
Long-Term Financing Facility financing schemes for exporters.32
In spite of this, many importers need to make advance payments exceeding this limit. Some companies set
up offices offshore – in the United Arab Emirates, for instance – for necessary payment formalities. Others
have resorted to informal payment systems such as hundi.33
Strict implementation of advance payment requirements has also created some difficulties for importers, who
have faced challenges at Pakistan customs when the amounts on payment receipts and invoices do not
match. Companies say this is usually due to exchange-rate fluctuations or changes in transportation fees
between the signed agreement and the arrival of shipments.
Importers face similar problems when the name of the buyer or its location differs on payment receipts and
invoices. This occurs when a Pakistan-based company places an order and the payment is made through a
subsidiary located in another country.
Importers find customs valuation ambigious

Many importers are unclear about the customs valuation process. Some believe their products have been
excessively valued, resulting in higher duties. Ambiguity in this process has led importers to hire clearing
agents, which costs them more money.
Importers are also concerned about the high charges imposed on their goods. In addition to customs duties,
many products are subject to ‘regulatory duties’. Pakistan imposes a regulatory duty on specific imports that
are already produced in the country. Different rates apply depending on the product involved.34 For instance,
vegetables are subject to a 10% regulatory duty, while importers of leather apparel and clothing can pay up
to 50% of custom surcharges.
Inspection process can be long

Lack of proper warehouse and cold storage facilities at border points is a major problem for Pakistani
importers. The customs clearance process takes longer than expected due to the absence of appropriate
infrastructure and a shortage of human resources. The arbitrary behaviour of officials and demands for
informal payments during inspections are also among the main challenges reported by importers.
Many companies struggle to fill out the import form, known as the ‘I-Form’. Various documents are needed
to complete this form, such as bill of entry, receipt of goods, proforma invoices and insurance. Importers say
they need advice on how to fill out this form.
32
Para 4 (d) (Annexure), Master Circular – Long Term Financing Facility (LTFF) for Plant & Machinery. Available at:
http://www.sbp.org.pk/smefd/circulars/2018/C3.htm
33
Hundi is an ancient financial instrument used in trade and credit transactions. It is used as a remittance instrument to transfer money,
as a credit instrument or IOU to borrow money, and as a bill of exchange in trade transactions.
34
See http://download1.fbr.gov.pk/SROs/201810171110228319SRO-1265(I)-201816.10.2018.pdf
40
What are the challenges of women entrepreneurs?

Participation of women in the formal economy is low
Very few women work at Pakistani trading
companies and there are few women
entrepreneurs in the country. On average, women
make up just 4% of the workforce in exporting or
importing enterprises (Figure 15). Female
employment is especially low at small firms (2%)
compared to medium-sized (8%) and large
businesses (13%). More than 60% of the
interviewed firms employed no women, and
women employees made up less than a tenth of
the workforce in 80% of the companies.
The share of exporting or importing companies

that have a woman as owner and/or manager
(defined as women-led) is also very low (8%). © Shutterstock
These results are in line with the general situation
in Pakistan. The average share of female employees in all Pakistani companies is 7.3%. 35 Likewise, women
own only 8% of the firms and manage 6%.36
Most women work in just a few sectors

Female employment is concentrated in just a handful of sectors, such as textiles and garments. One reason
for this is that women lack knowledge of and exposure to other sectors and operating procedures. Another
factor is the limited number of dedicated entrepreneur training centres and advisory services for women.
Many female employees engage in activities that are similar to their household duties or which they learned
from their families. Textile and garment manufacturing is one of these activities. Readily available raw
materials and expertise is another factor that has motivated women to work in this sector.
Similarly, women-led trading companies are also concentrated in just a few sectors. Almost half of the
companies that are owned or managed by women are in the textile and clothing sector (45%), followed by
the agriculture sector (27%) – exporting fresh and processed food. Another 10% of the firms are in the
miscellaneous manufacturing sector, exporting products such as handicrafts. In terms of geographical
distribution, more than 90% of the women-led companies are located in two provinces: Punjab and Sindh.
Regulations affect more women-led enterprises

Female entrepreneurs generally experience the same sort of problems with regulations that their male
counterparts experience. However, these measures affect a greater share of women-led firms.
Overall, 66% of women-owned exporting companies said they faced difficulties with trade regulations,
compared with 51% of men-owned firms (Figure 32). These difficulties are due to overly strict or complex
regulations, or because the related procedures make it difficult to comply with the regulations.
Women-led firms struggle with domestic regulations

Pakistani export regulations caused 54% of the problems that women-led businesses had with non-tariff
measures (Figure 32). In contrast, difficulties with domestic export regulations made up 45% of the cases of
men-led companies. These measures include rules on inspections and export restrictions, as well as hurdles
with tax rebates on exports.
35
World Bank (2019). Enterprise Survey. http://www.enterprisesurveys.org/Data/ExploreTopics/gender
36
Ibid.
41
Figure 32 Burdensome regulations affect more women-led exporters than men-led exporters
Share of companies affected by NTMs is higher among women-led businesses
Women-led businesses
66% experiencing difficulties with
NTMs and related procedures
Men-led businesses
51% experiencing difficulties with
NTMs and related procedures
Types of NTMs companies find burdensome is similar among men-led and women-led businesses
5% 1%
38%
45%
39%
54%
2%
3% 4% 3%
Men-led Women-led
companies companies
Finance measures Price-control measures
Anti-competitive measures Distribution restrictions
Rules of origin and related certificate of origin Pakistani export-related measures
42
Proving compliance with technical requirements is hard

Women-led businesses, like those headed by men, also have serious problems with conformity assessment
requirements (38%) such as product testing and certification (Figure 32). In fact, exporters find it harder to
prove compliance with regulations than to comply. This is usually due to high costs and administrative
hurdles related to conformity assessments. Limited infrastructure and a lack of well-trained staff have
contributed to various problems of quality compliance in Pakistan.
Many women-led enterprises are not successful exporters

There are numerous reasons that few Pakistani women-led companies export successfully. While many of
these firms export, it is usually on a small scale and through informal channels. As per the NTM survey
methodology, such companies were not interviewed because they are not active exporters or are not
exporting formally.
To shed light on why many enterprises headed by women have not achieved export success and why some
export only informally, women entrepreneurs and experts were interviewed separately on this issue.
Most women-led businesses are informal and small scale

Women-led companies lack the expertise and guidance
on how to move from one phase to another in the Women development issues:
entrepreneurship process. These businesses are From federal to provincial oversight
concentrated in a few traditional areas and have limited
exposure to the international market. Financial Until 2010, the Ministry of Women Development
constraints hinder their ability to scale up and enter new managed day care centres, hostels for working
markets. women and the training-cum-production centres
known as Sanatzars in many villages.
Roughly two-thirds of the women-owned businesses
that were interviewed are members of at least one The 18th Amendment in the Constitution of
chamber of commerce or association. Another 14% Pakistan made major changes to the regulatory
were in the process of obtaining membership. framework for the development of women. As of
2010, the duties and power of the federal Ministry
The current trading profile of these companies shows of Women Development were transferred to the four
provincial governments.
heavy dependence on informal channels. More than
73% ‘export’ informally, occasionally and in small The development of women thus became a
quantities. Less than 20% receive payments through provincial matter, and women development
bank transfers. Most rely on informal methods such as departments were created in the provinces with
hundi. their own budgets. The Punjab Women Department
has been the most active and effective. It has
Women entrepreneurs lack good business practices undertaken many initiatives, such as establishing
and sufficient understanding of the market demands Working Women Hostels and the Punjab Day Care
Fund Society.
Most women-led enterprises are small ventures, and
usually they do not have a good or any business plan. They rely extensively on their immediate vicinity to
purchase supplies and are not able to manufacture competitive export products.
Few women-led firms understand the demands of customers in the international market because they lack
information and adequate guidance. Identifying genuine buyers for their products is a key hurdle. Women
entrepreneurs in Pakistan are unable to segment the market and target their buyers. They also do not have
the proper skills to engage with customers and market their goods.
In most cases, government departments and chambers are unable to support businesswomen sufficiently in
these areas. Although some institutions offer training to promote women-led companies, most are unable to
deliver tangible business success due to a lack of follow-up support and guidance.
Production capacity is limited

Because they are small, women-owned enterprises generally do not have facilities for large-scale production.
They miss out on economies of scale as a result. These companies typically create handicrafts such as
embroidered garments and home linens, so it is difficult to scale up production to fill big orders. Given these
43
circumstances, women-led businesses are apprehensive about the risks associated with large orders from
overseas.
Lack of access to trade finance holds back businesswomen

Many Pakistani businesswomen are unable to obtain financing. They lack enough collateral for bank loans
and therefore cannot expand production to fill big orders for export or even operate a local sustainable
business.
Another concern is the absence of information about financing and loan schemes offered by banks. SBP
has implemented policies for loans on easy terms that would probably benefit women-led enterprises. But
women entrepreneurs need information and and training so they understand how to use these loan schemes.
Inadequate information is a major obstacle

Although many women entrepreneurs in Pakistan actively use social media, they do not have sufficient
technical skills to search online for information about markets and requirements. Many struggle to fill out
simple forms or to interact effectively with foreign customers via e-mail. Their inability to access information
limits their capacity for growth.
Some Pakistani businesswomen say they feel overwhelmed at customs because of past experiences and
their unfamiliarity with customs regulations and procedures. As a result, they were subject to bribery,
harassment and extra costs due to mistakes. Many are wary of cargo agents and prefer to send small
consignments abroad through courier services. Payments are usually received not through the banks, but
by hundi.
Many women also feel that business and trade support institutions are biased against them. Women say
they are harassed when approaching these institutions for information due to the lack of gender sensitization
among male officials.
Women are missing out in trade policy formulation

The true contribution of women to cross-border trade is not documented, because they operate mostly in the
informal sector. The Government does not have sufficient data to develop a clear view of the role of women-
led enterprises in international trade. As a result, the interests of these businesses are not adequately
considered in Pakistani trade policy.
Furthermore, the voices of women are absent when trade policy is formulated. There is a lack of consultation
between the Ministry of Commerce and the agencies focusing on women development. While Pakistan has
long recognized the need to close the gender gap, few women are involved economic policy discussions.
Although 17 Chambers of commerce focusing on women are registered with the Directorate General of
Trade Organizations, most are still in a nascent stage and have a limited role in formulating trade policy.
These chambers also do not yet have the capacity to support their members or help them get market
exposure.
Businesswomen need support and guidance to export successfully

There is no dedicated and capable organization in Pakistan to properly guide women entrepreneurs from
business development to export success. Although the Government, non-governmental organizations and
international organizations have arranged training programmes for women, these initiatives are not
sustainable because they are limited and irregular. An institution that can guide women and provide regular
training programmes is needed.
Many women are unaware of government or other incentives aimed at supporting them. They lack
knowledge about trade policies and expertise to benefit from trade opportunities. Informing women and
building their capacity to develop their business is an important step to ensure their eventual export success.
Aspiring entrepreneurs should be encouraged to form clusters to share information, seek opportunities and
projects to support businesswomen, and attend workshops to expand their capacity and address their issues.
44
Social constraints need to be addressed

Another important factor that should not be overlooked is the social constraints women entrepreneurs face,
including from their immediate family. Balancing their domestic responsibility with their commercial ventures
is a huge challenge. Families often do not support the business aspirations of women, and women are
prevented from travelling to buy supplies or market their products. Many are also discouraged from
formalizing their business to avoid complications with the tax authorities.
Overcoming hurdles
Action is needed on three fronts to tackle the difficulties that Pakistani businesswomen face: (i) improving
the general business environment, (ii) eliminating non-tariff barriers that block all trading companies in the
country and (iii) addressing issues that prevent women entrepreneurs from exporting successfully.
National regulations and procedures – especially those related to advance payments of imports, tax rebates
and export inspection – must be examined and made more business-friendly, especially for women.
Changes are needed in export-quality infrastructure and management to make conformity assessment
procedures efficient and to improve quality compliance. Better trade information is essential to help Pakistani
companies access foreign markets.
Additional targeted assistance is needed to support women entrepreneurs. Pakistan should mainstream
gender in trade policy by promoting equitable and inclusive outcomes in export-led strategies. At the micro
level, businesswomen must be given access to suitable trade-related information and assistance through
capacity-building programmes so they can understand and comply with trade requirements. Better access
to financial services is also necessary.
45
CHAPTER 3 THE PUBLIC SECTOR
© Shutterstock
Pakistani trade laws and regulations
Most Pakistani laws and regulations governing cross-border trade fall within the ambit of the federal
government. Following the 18th constitutional amendment of 2010, however, provincial governments are now
responsible for implementing environmental protection and health laws.
The principal regulations governing Pakistani trade include:
The Imports and Exports (Control) Act, 1950

Article 3 of the Imports and Exports (Control) Act, 1950, gives the Government, through the Ministry of
Commerce, the authority to prohibit, restrict or otherwise control the import or export of any goods and to
regulate all practices and procedures involved in import and export.
The Customs Act, 1969

The Customs Act of 1969 empowers the Federal Board of Revenue to collect duties and other tariffs on
imports. Chapter IV bans both the import and export of items that may infringe on intellectual property rights.
Section 15 (c) of the act bans the import and export of goods with a counterfeit trademark 37 or a false trade
description.38 Similar provisions ban the import and export of products that may infringe copyright, layout
design or patents. This measure is intended to discourage piracy.
The Pakistan Animal Quarantine Act, 1979

The Animal Quarantine (Import and Export of Animal and Animal Products) Act of 1979 empowers the
Government to prohibit, restrict or otherwise regulate the import or export of any animal, class of animals or
37
Within the meaning of the Pakistan Penal Code, 1860 (Act XLV of 1860).
38
As defined in the Copyright Ordinance, 1962 (XXXIV of 1962), the Registered Layout-Designs of Integrated Circuits Ordinance, 2000
(XLIX of 2000), the Registered Designs Ordinance, 2000 (XLV of 2000), the Patents Ordinance, 2000 (LXI of 2000), and the Trade
Marks Ordinance, 2001 (XIX of 2001).
46
animal products likely to introduce disease to other animals, animal products or humans. Section 3 explains
that the act shall be applied as though it were part of the 1969 Customs Act.
In addition to the quarantine officer created by this act, customs officers also have jurisdiction over animal
imports. The act empowers quarantine officers to set testing and certification requirements, destroy animal
products that they find to be contaminated and deport unsatisfactory imports at the expense of the exporter.
The Pakistan Plant Quarantine Act, 1976

The Plant Quarantine Act instructs the Government to set quality controls on imports that could infect plants
and their products. Section 3(1) empowers the Government to restrict or otherwise regulate the import of
any article/class of articles likely to infect any crop/plant, or of any pest/class of pests.
Plant Protection Rules 14–28 restrict the importation of 14 products into Pakistan from countries that have
had instances of pest or disease infestation. The controlled items are potatoes, rubber, sugarcane, tobacco,
citrus plants, coffee plants, bananas, coconuts, groundnuts, maize, tea, onions, garlic, shallots, soil, compost
and cotton. These goods are not restricted entirely, but are only banned from countries where specific
infestations have been recorded or suspected. Under the Plant Quarantine Act, the Department of Plant
Protection has considerable discretion to decide whether an imported item is infested and whether it should
be destroyed, disinfected or deported.
The Pakistan Standards and Quality Control Authority Act, 1996

This act established the Pakistan Standards and Quality Control Authority, which is responsible for setting
standards for exports from and imports into Pakistan. Section 8 specifies the powers of PSQCA, including
the creation and implementation of tests, the granting and withdrawal of licences, the establishment of
voluntary and mandatory standards, and registration of inspecting agencies, inter alia.
PSQCA has adopted 15,000 standards from the International Standards Organization (ISO) and 6,000
standards from the International Electrotechnical Commission. It has developed 5,764 additional standards
through its Standards Development Centre.
The Drugs Act, 1976, and the Drug Regulatory Authority Act, 2012
Under section 4(2) of the Drugs Act, the Government may direct that a drug or class of drugs cannot be
imported or exported save for the issuance of a licence, official order or registration in accordance with rules
or through a government agency. The Government can also prohibit the import or export of any drugs.
The Drug Regulatory Authority Act, 2012, created the Drug Regulatory Authority. It also bans several items
under its second schedule. These include any unregistered therapeutic drug not in conformity with the
registration dossier and associated pharmaceutical evaluation or in contravention of any of the provisions of
this act or rules, and any drug that is dangerous to health even when used according to prescribed usage.
The restrictions in this act have been incorporated into the Import Control Policy.
The Import Policy Order, 2013

Under section 21 of the Import Policy Order, 2013, the Federal Government may, where it deems it to be in
public interest, suspend for a specified period or ban the import of any goods from all or any source.
The Export Policy Order, 2016

The Export Policy Order, 2016, provides the rules on exports and conditions that may be imposed. Schedule
I contains the list of the goods that cannot be exported and Schedule II lists the exports that are subject to
conditions.
Business associations identify trade policy shortcomings

More than half of the business associations in Pakistan (55%) believe the country has not made satisfactory
progress on trade policy and trade agreements (Figure 33). Among the main problems they identified were
the difficulties that changing and uncertain trade policy have created for traders. Traders and stakeholders
are not properly consulted when Pakistan develops trade policy or negotiates trade deals, according to
47
business associations. Also, companies are expected to adjust to the new realities when a new policy or a
trade agreement is implemented, which is not always easy for them to do or in their best interest, they said.
Figure 33 Most business associations are unhappy with progress on trade policy and agreements
Satisfactory
25%
Poor
Good 55%
20%
Rating of business associations on

Pakistan’s progress in its trade policy and
agreements since 2014
Business associations also criticized the inability of the Government to reduce the heavy reliance of the
country on imports (compared to its export volume).
The issues highlighted by business associations mirror those brought up by exporters and importers on
policies such as advance payment requirements and burdensome procedures for tax rebates that have
affected a large number of companies.
The associations consider the China-Pakistan Free Trade Agreement to be one of the major achievements
of Pakistani trade policy. They believe the country negotiated better terms with China and facilitated the
import of raw materials for manufacturing.
48
Pakistan Customs
The responsibilities of the Pakistan Customs Service range from revenue collection to helping smooth trade.
Its key responsibilities include: 39
Revenue collection
The Federal Board of Revenue collected about $27.8 billion in
revenue in 2018, of which $4.4 billion (almost 16%) was through
the collection of customs duties.39
Controlling smuggling Enforcement of customs laws

Pakistan Customs seeks to The customs service enforces the
control the smuggling of goods, Customs Act, 1969, as well as a
especially along the country’s number of related laws such as the
long and porous border with Imports and Exports (Control) Act, the
Afghanistan. Drugs Act and the Quality Control Act.
Role of
Pakistan
Customs
Averting trade in counterfeit Narcotics Interdiction

and pirated goods
A variety of narcotics are
The customs administration, in manufactured in the region and
collaboration with other smuggled through Pakistan, and
government agencies, imposes Pakistan Customs aims to foil such
strict controls on the import and attempts.
export of pirated goods and
software in any form.
Trade facilitation
Pakistan Customs seeks to introduce and implement policies that
help facilitate trade. Pakistan is a contracting party to the revised
Kyoto Convention as well as WTO Trade Facilitation Agreement.
Challenges
Some of the biggest constraints at Pakistan Customs that need to be addressed include:
Customs needs a skilled workforce

Pakistan Customs lacks enough skilled workers to effectively carry out the responsibilities of the
administration. Its export collectorate currently functions with only 50% of the authorized operational staff,
which compromises efforts to facilitate and monitor exports. The customs service has initiated a recruitment
process to increase its workforce.
Furthermore, as many experienced officials are expected to retire in the coming years, efforts are underway
to ensure that a skilled workforce is in place by 2020. To reach this goal, the Directorate General of Training
and Research has been enlisted to train officers at all levels.
Customs procedures and system lack harmonization

The amount of time required by customs, ANF and terminal operators to carry out their tasks is generally
lengthy and must be shortened. The absence of a formal coordination mechanism at the level of each
collectorate that carries policy approval at the highest level is a major hurdle. Inter-agency coordination with
well-defined protocols and standard operating procedures are required so that exporters have a single-
window facility at ports. Terminal operators must also upgrade cargo-handling facilities and infrastructure.
39
Pakistan Economic Survey 2018–19, Finance Division, Government of Pakistan (2018–19, p. 60). Figures converted to US$ by ITC
based on the exchange rate of 31 December 2018 ($1 = PKR 138).
49
Pakistan Customs will continue to struggle to meet the needs of traders and effectively facilitate trade unless
it streamlines and harmonizes its procedures and system. The customs service has initiated plans to set up
a sustainable computerized system, develop an effective risk-management organization and strategy, and
create an electronic single window to address these issues.
Global customs networks offer some answers

Complex problems such as security of supply chain, money laundering and transfer pricing have emerged
as key challenges to international trade. Pakistan Customs should be ready to tackle these issues.
An e-customs network is a viable remedy to meet these twenty-first century challenges, and Pakistan has
embarked upon this initiative. Pakistan Customs has met with customs authorities in neighbouring countries
including China and the United Arab Emirates to exchange seamless data on a real-time basis.
Karachi Export Processing Zone needs better infrastructure

The absence of suitable infrastructure at the Karachi Export Processing Zone is a challenge. The zone needs
to be upgraded with modern weighbridges and scanners. Proper examination yards, access points/roads for
the movement of containers outside the zone, waste disposal and auction facilities are also necessary.
How do officers at Pakistan Customs perceive exporters and importers?

Discussions were held with customs field officers to obtain first-hand information about their interaction and
experiences with Pakistani exporters and importers. Their inputs are summarized below.
Customs officers say exporters have been quick to make use of government incentives. Exporters have used
export facilitation schemes – such as export-oriented units, the manufacturing bond scheme and the Duty
and Tax Remission for Exporters initiative – to reduce the cost of inputs for production of their goods and to
improve the quality of products by modernizing their manufacturing facilities by importing capital goods for
less money.
Customs officers believe exporters are generally law-abiding, thanks in part to the low number of
contraventions committed by the exporters. Most Pakistani exporters and clearing agents comply with
procedural and legal requirements, though they need more education about customs rules and procedures
and the provisions of the import and export policy orders.
Field officers in the customs service see their role as service-oriented towards importers and exporters. They
say they aim to provide maximum facilitation to all bona fide traders.
What are the common difficulties and conflicts with exporters and importers?
The Government has focused on trade-based money laundering and, as a result, Pakistan Customs is
watchful for misinvoicing. In the case of exports, shipments may be misdeclared by undervaluing the
commodities, shipping to a transit destination and reissuing a new declaration with actual values for the final
destination. This practice means that only a fraction of the foreign exchange is remitted to Pakistan and a
major part of export proceeds is retained in the third country. 40
When customs officers determine that a declared value is not correct, the exporter is asked to prepare E-
Form for the value differential. Customs officers say exporters tend to resist submitting an additional E-Form,
arguing that it creates a hardship for them and that their value is fair. Pakistan Customs expects this issue
to arise more frequently (and to create more friction with exporters) in the future because of increased
customs watchfulness for underinvoiced exports.
Officers occasionally find packing of export consignments to be unhygienic and substandard. They also find
that many exporters are unaware of the importance of fumigating goods as well as wooden boxes for SPS
reasons.
When it comes to imports, many consignments are released without any issues through the Green Channel
of Customs Computerized System – WeBOC Glo. Disputes between importers and customs usually centre
40
See https://fp.brecorder.com/2019/06/20190615486449/
50
on the valuation and tariff classification of goods, and a proper redressal mechanism is available. Any
importer who objects to the decision of a customs officer can file a request of review before the principle
appraiser and a second review before the assistant collector.
Traders, their managers and clearing agents often have a poor understanding of the law, according to
customs officers. Sometimes, traders are unprepared and do not file the obligatory documents, they said,
and recordkeeping and maintenance of accounts is often not up to the mark. Improper or non-filing of detailed
goods declarations has caused difficulties during the examination and assessment stages.
Export inspections are delayed for different reasons

Exporters complain about the way ANF carries out inspections, especially delays and damage caused to
products or packaging. In response, customs officers noted that ANF faces tough challenges to thwart the
smuggling of narcotics, making its task critical.
Customs can only examine and release consignments that are cleared by ANF, so delays are inevitable.
The WeBOC system is not able to record and monitor how much time customs officers and ANF each need
to clear export cargo.
Several issues make it difficult for ANF to work efficiently,41 such as containers not being grounded in time
and substandard packaging. In addition, the amount of time between port entry and loading onto ships is
often insufficient, machinery for reloading bulky or heavy cargo is unavailable, and the documents sent to
the agency sometimes contain errors.
Customs takes steps to improve its operations
Customs modernization
Pakistan Customs recently completed several diagnostic studies to identify ways to upgrade the customs
administration. These exercises pinpointed strengths, weaknesses and areas of opportunity as well as
proposed actions that have helped shape the strategy of Pakistan Customs to modernize and improve its
operations. These have contributed to improvements in areas such as customs risk management, post-
clearance audit, customs valuation, legal updating of current customs laws and strategic planning.
The Integrated Transit Trade Management System is another important customs modernization initiative.
The current infrastructure for land crossings in Pakistan is inadequate for the efficient management of border
processes. To remove key bottlenecks to the movement of goods, the Government began a project to build
new infrastructure and facilities at the Torkham, Chaman and Wahga border posts. The project is expected
to substantially improve border-crossing operations and trade between Pakistan and its neighbours.
Pakistan has committed to facilitating the smooth flow of international trade in accordance with the provisions
of the WTO Trade Facilitation Agreement. Pakistan Customs has begun several projects – including an
authorized economic operator programme – to ensure compliance with the Agreement for expeditious
clearance of exports and imports.
National single window implementation

Pakistan Customs launched the National Single Window Project with the objectives of:
 Making it easier to submit information to the government.

 Cutting costs through a single submission and lower fees to prepare documents.
 Reducing the interaction of traders with multiple government agencies – combined response on
release, coordinated inspection, etc.
 Saving time, leading to decreased costs in carrying inventory.
41
Based on Trade Dispute Resolution Organization field visit report to Karachi port.
51
Other improvements
To enhance export and import procedures, Pakistan Customs has:
 Issued standard operating procedures to streamline the issuance of certificates to exporters and
facilitate refunds of local taxes from the State Bank of Pakistan.
 Arranged round-the-clock clearance of export cargo.
 Ensured the constant fine-tuning of export modules, after receiving feedback from all stakeholders,
by sending change requests to the Directorate of Reforms and Automation. Customs expects recent
changes in export facilitation schemes, including complete automation of Duty and Tax Remission
for Exporters processes, to help expedite exports.
 The Model Customs Collectorate (MCC) Exports Karachi is developing new WeBOC modules so
the system can be launched in port areas that are now being handled through One Customs, i.e.
East Wharf, NMB Wharf and Oil Terminals.
 Streamlined procedures allowing importers to submit original certificates in advance, without a
formal message from the WeBOC system.
 Ensured customs examination of goods on the same day.
 Upgraded the customs laboratory by procuring the latest testing equipment.
Business associations see a need for better customs procedures

Opinions among business associations are divided on how much Pakistani customs procedures have
improved. Half believe the efforts made over the last five years have not been satisfactory, while the other
half say it has been satisfactory. About 20% rate the progress to date as good (Figure 34).
Figure 34 Half of business associations are satisfied with improved customs procedures
Satisfactory
30%
Poor
Good 50%
20%
Rating of business associations on the

improvements in Pakistan’s customs
procedures since 2014
The main complaints of business associations about customs are complex procedures, multiple taxes,
inspections and damage to products. To remain competitive, many traders smuggle goods or submit invoices
with prices that are higher or lower than what they intend to charge clients.
The absence of adequate equipment at borders, such as large scanners and cooling facilities, is also a major
hurdle for traders, business associations say.
The development of the WeBOC system has been the biggest improvement vis-à-vis customs procedures,
according to these associations. Many manual processes have been moved to the automated WeBOC
portal, which has made the process easier and more efficient. Pakistan has applied parts of WeBOC and
continues to work towards full implementation.
52
Export-quality management and infrastructure
Standards setting
The Pakistan Standards and Quality Control
Authority is responsible for developing and
publishing standards. The authority is a member of
the International Standards Organization and the
International Electrotechnical Commission, and it
also liaises with the WTO on TBT-related issues.
PSQCA is involved in inspections, testing and

product certification. It also administers mandatory
standards, about half of which concern food items.
PSQCA controls around 40 food items listed in a
© Shutterstock
mandatory items list notified through the Gazette of
Pakistan.
Following the 18th Amendment Act of 2010, the

regulatory control of food safety and quality became the responsibility of provincial governments. The
national standards formulated by PSQCA for rice, fruit, vegetables and meat can be used voluntarily as a
reference standard while finalizing the terms of business contracts. The responsible provincial food safety
authorities control the quality of food for each province.
Conformity requirements in Pakistan differ for local sale and export.
Accreditation
The Pakistan National Accreditation Council is the lead agency for accrediting public and private sector
bodies that offer conformity assessment services. The council’s accreditation scheme provides official
recognition of the integrity and reliability of an inspection body’s services. This accreditation scheme aims to
upgrade the standard of inspection activities to support sound decision-making with regard to safety,
performance and reliability.
In 2004, the council initiated the ISO/IEC 17025 accreditation of laboratories, which establishes the general
requirements for the competence of the testing and calibrations of laboratories. As a member of the Mutual
Recognition Arrangement of the Asia Pacific Laboratory Accreditation Cooperation and the International
Laboratory Accreditation Cooperation, more than 70 countries recgonize testing reports issued by
laboratories that are accredited by the Pakistan National Accreditation Council.
Accreditation under ISO 17025 is voluntary. However, global expectations and stricter trade requirements
have been a driving force for laboratories to obtain this accreditation. The Pakistan National Accreditation
Council certifies laboratories that work in the fields of microbiological, chemical, food, construction and
construction products, electrical, environmental, textile, petrochemical and pharmaceutical testing. To date,
the council has accredited 152 Pakistani laboratories in these fields.
Inspection bodies for food and textiles export

Accredited inspection bodies in Pakistan offering preshipment inspection services for export consignments
comply with ISO 17020:2012. This conformity assessment standard specifies requirements for the
competence of inspection bodies and for the impartiality and consistency of their activities.42 Bodies that
inspect rice consignments also are capable of classifying and grading quality.
In addition, a few other preshipment inspection bodies that check rice and textile consignments are not
accredited by the Pakistan National Accreditation Council.43 However, they are legal entities working under
Pakistani regulations.
42
See https://www.iso.org/standard/52994.html
43
For example, Control Union Pakistan, Bhombal and Co. Surveyors, Pakistan Inspection Company, etc.
53
Table 4 Inspection bodies active in food and textile trade
Inspection Laboratory
Laboratory accreditation status accreditation status Types of items inspected
(ISO 17020:2012) (ISO 17025:2012)
Bureau Veritas Pakistan (Pvt.) Ltd Accredited Non-accredited Grain (wheat, rice, corn, pulses);
1
(Karachi) cereals
BV Consumer Products Services Accredited Accredited

2 Textile and textile products
Pakistan (Pvt.) Ltd (Lahore)
Accredited Non-accredited Livestock, meat, grain (wheat, rice,

Inspectorate Pakistan (Pvt.) Ltd, corn, pulses, oilseeds), food and
3
(Karachi) beverages, textiles and textile products,
general manufactured goods
Accredited Non-accredited Grain (wheat, rice, corn, pulses), grain

Baltic Control Pakistan (Pvt.) Ltd products (cereals, snacks, bakery
4
(Karachi) items), cotton fibre, general
manufactured goods
TTI Inspections Pvt. Accredited Accredited

5 Textiles and textile products
(Lahore)
Pakistan Standards & Quality Accredited Accredited

Control Authority (PSQCA) Livestock, butter, food for infants,
6
Standards Development Centre crops, wafer biscuits, biscuits
(Lahore)
SGS Pakistan Non-accredited Accredited

7 Food items, textiles
(Karachi)
Intertek Pakistan (Pvt.) Ltd Non-accredited Accredited

8 Food items, textiles
(Karachi)
Rice exports
Preshipment inspection bodies draw rice samples and hand them over to laboratories for testing and
analysis. Although most Pakistani labs have a limited scope of analysis, many offer a wide range of services
to ensure the quality and safety of the rice crop. Some of the key sets of analysis for rice exports include:
 Physical analysis: Representative rice samples are manually segregated based on their physical
characteristics, grade and colour.
 Mycotoxins: Liquid chromatography, thin-layer chromatography and ELISA techniques are used to
determine the presence of toxins in rice including aflatoxin (B1, B2, G1, G2), Ochratoxin A,
deoxynivalenol and fuminosins.
 Pesticide residue analysis: Chromatography is used to analyse the maximum residue levels of
pesticides.
 Heavy metals: Inductively coupled plasma mass spectrometry (ICP-MS) and atomic absorption
photometer techniques are used to determine whether rice has been contaminated by arsenic,
cadmium, mercury, lead and other heavy metals.
 Testing for genetically modified organisms: A real-time polymerase chain reaction test is used
to detect whether rice has been genetically modified.
 Nutritional facts: Tables showing nutritional facts are mandatory on consumer packing in many
countries. A nutritional analysis of the sample is required, covering energy, carbohydrates, fat,
protein, dietary fibre, vitamins and minerals. Leading laboratories of Pakistan are able to do this
analysis.
 Other tests: Starch content (polarimetric), amylose content and whiteness are a few of the examples
of rice tests that may be required for specific purposes.
54
Eleven accredited laboratories, seven of which are public, offer rice-testing services in Pakistan. Eight non-
accredited labs, three of which are public, work in a similar domain. 44
The Pakistan Council of Scientific and Industrial Research in Karachi offers the widest range of rice testing
and analysis, including for genetically modified organisms, pesticides and heavy metals, as well as nutritional
profiling. It issues test reports to declare any consignment ‘fit for human consumption’ based on
microbiological and mycotoxin analysis.
The Pakistan Council of Scientific and Industrial Research in Lahore is located in the heart of Pakistan’s rice-
producing region and attracts many requests, especially for mycotoxin and microbiological analysis.
Other public laboratories, such as the Industrial Analytical Center, ICCBS Karachi and the Grain Quality
Testing Lab, also draw a huge number of rice exporters in need of certificates of quality and SPS compliance.
SGS and Intertek, which offer a range of services on quality certification and preshipment inspection
assessment, are the most well-known private labs.
Some laboratories also specialize in a specific domain:

 The National Institute for Biotechnology and Genetic Engineering focuses on testing for genetically
modified organisms;
 The Nuclear Institute for Agriculture and Biology conducts varietal research in the field of nuclear
technology;
 The Rice Research Institute offers varietal identification services;
 The Trading Corporation of Pakistan provides varietal certificates for brown rice;
 Romer Lab is well known in the field of mycotoxin analysis;
 Qarshi Lab and Global Lab work on nutritional profiling.
Public labs compete with private sector labs. Public laboratories also operate as third-party service providers
under agreements with private labs.
Fruit and vegetable exports

It is the responsibility of either the Department of Plant Protection or the consignee to draw the samples from
fruit and vegetable consignments, as per the contract conditions or prevailing quarantine law. Ten accredited
laboratories, six of which are public, offer testing service for fruit and vegetables. A few non-accredited public
labs are also active in this domain.45
The pesticide residue limit is the most common SPS criterion that is controlled for fruit and vegetable export
consignments. Compliance certificates issued by public sector labs can attest that the products satisfy the
requirements.
The Pakistan Council of Scientific and Industrial Research (Karachi), the Industrial Analytical Center, ICCBS
Karachi and the Grain Quality Testing Lab (Karachi) offer these testing and analysis services in Sindh and
Balochistan provinces. Similarly, the Nuclear Institute for Agriculture and Biology (Faisalabad) and Pakistan
Council of Scientific and Industrial Research labs (Lahore and Peshawar) offer services in the Punjab and
KPK regions. Heavy metal, microbiological and nutritional analysis services are available at all of these labs.
Public sector labs are prominent in the fruit and vegetable testing sector. Samples must be analysed quickly
because these crops are perishable. Private sector labs also offer other services, such as nutritional profiling,
in addition to the testing and certifications required by DPP.
Meat exports
The Animal Quarantine Department checks exports of meat and related products at exit points. A large
proportion of Pakistani meat exports is chilled meat, which has a short shelf life, so time-consuming lab
44
See Appendix V for a list of laboratories operating in Pakistan that offer rice-testing services and the various parameters they cover.
45
See Appendix V for a list of Pakistani laboratories that offer services in horticulture testing and the parameters they cover.
55
analysis is not feasible. Several labs in Pakistan offer quality-testing services for meat consignments. A few
laboratories specialize in disease control in the poultry and livestock sectors. 46
While AQD controls SPS compliance for exports, provincial food authorities regulate the quality and safety
of meat sold on the domestic market. These activities are usually handled by the food authority’s own
laboratories or through third-party service providers.
Textile and fabric exports

Both private and public labs offer chemical and physical testing services to the textile and fabric industry.
These laboratories are mainly concentrated in Karachi, Faisalabad and Lahore. The leading laboratories,
which are accredited by the Pakistan National Accreditation Council, carry out a wide range of testing.
Some of the major categories for textile and fabric analysis include: Fibre composition and analytical testing;
dimensional changes and appearance; color fastness; physical and performance testing; fabric construction;
special finishes; moisture management; yarn testing; and flammability and burning behaviour.
Preshipment inspection bodies are responsible for ensuring that the quality of a product meets the
requirements of the buyer. These bodies are designated in the initial contract. As frequent visits to the factory
and on-site inspections are mandatory, public sector labs are rarely active in this sector. However, some
public laboratories (for example, Pakistan Council of Scientific and Industrial Research labs) can conduct
some testing work from small PSI bodies textile business operators without their own testing facility.
What treatment facilities are available in Pakistan
Irradiation
The Pakistan Atomic Energy Commission has established several irradiation facilities, such as the Nuclear
Institute of Food and Agriculture in Peshawar, that can be used by exporters. Since the commission began
offering radiation and sterilization services in Lahore more than a decade ago, commercial gamma irradiator
facilities for sterilization have grown in Pakistan. 47 Private sector companies have also started to provide
food irradiation services, especially for legumes, spices and fruit. In 2015, a private sector joint venture set
up a pioneering e-beam facility for fresh fruit and vegetables in Karachi.48 More facilities have been
established since then, with donor support. 49
Fumigation
Several fumigation facilities are available, registered under DPP. For instance, SGS Pakistan provides
fumigation services for stored goods, cargo and shipments, as well as disinfection services for food and
beverages.50 Pak Fumigation System (Lahore) provides pest- and damage-control services for goods and
cargo, as well as a heat-treatment facility for wood-packing materials.51 Pakistan Pest Control (Karachi)
fumigates raw materials, cargo containers and wood packaging.
Vapour heat and other treatments

Pakistan Agro-tech Company, a subsidiary of the Pakistan Agricultural Research Council, has a vapour heat
treatment plant for fruits and vegetables.52 Private companies such as Universal Trading Corp. also have
vapour heat facilities to treat fruit and vegetables. Several produce exporters have their own treatment
facilities, such as steam treatment plants, blast chillers and cold storage. 53
46
See Appendix V for a list of Pakistani laboratories that offer services in meat testing and the parameters they cover.
47
See http://www.foodirradiation.org/pages/fandv_countries/Pakistan.html
48
See http://www.agricorner.com/fruit-vegetable-other-sectors-to-get-e-beam-facility-to-increase-exports/
49
See https://www.thenews.com.pk/print/464778-usaid-introducing-innovative-technologies-for-pakistan-s-agriculture
50
See https://www.sgsgroup.pk/en/trade/commodity-trading/agricultural-goods/pest-control-and-fumigation/fumigation-services
51
See http://www.pakfumigation.com/index.html#services
52
See https://www.dawn.com/news/1187206)
53
All Pakistan Fruit & Vegetable Exporters, Importers & Merchants Association (http://www.pfva.net/)
56
Availability of trade-related information

Information is essential
Lack of information is one of the major market access barriers for Pakistani traders, especially new
enterprises. The first step for exporters to enter the international market is to understand the necessary
requirements. They also need to know how to fulfil those requirements.
The following section examines the current landscape of trade-related information available online.
Mapping the availability of trade-related information online
Trade statistics
State Bank of Pakistan

Export and import of goods by commodity and country (in PDF format).
Latest information available: September 2019 (exports), June 2019 (imports).
http://www.sbp.org.pk/publications/index2.asp
Federal Board of Revenue

Import and export search available by commodity and country.
Latest year available: 2015.
https://fbr.gov.pk/categ/imports-exports/51149/70850/%20131177
Trade Development Authority of Pakistan

Monthly advance release (provisional) and yearly trade statistics reports.
Latest available: September 2019
htt ps://www.tdap.gov.pk/tdap-statistics.php
Trade agreements and preferential access
Ministry of Commerce
Regional and bilateral trade agreement texts available.
Information related to US and EU Generalized System of Preferences schemes
is available in the form of FAQs.
http://www.commerce.gov.pk/about-us/trade-agreements/
Customs tariffs
Provides custom duties levied on each product (in PDF format).
Latest information available: 2019/20 (updated in June 2019).
https://fbr.gov.pk/categ/customs-tariff/51149/70853/131188
57
Non-tariff measures
Ministry of Commerce (MoC) ● Federal Board of Revenue (FBR) ● Ministry of
Climate Change (MoCC) ● Ministry of National Food Security and Research
(MNFSR)
Includes statutory text of Import Policy Order 2016 and Export Policy Order 2016,
statutory regulatory orders and Foreign Exchange Manual.
Further details related to statutory amendments of the import and export policy orders,
regulatory changes involving specific products including SPS/TBT regulations, pre-
shipment inspection, product regulations, export/import bans, exemption from
customs duties, the currency in which export/import is allowed, and statutory
amendments providing for incentives for export/import.
MoC: http://www.commerce.gov.pk/sros/
FBR: htt ps://w ww. fbr. gov. pk/c ateg/imports-exports/51149/ 70850/ 131173
MoCC: http:// www.m occ.gov.pk/policiesDetails.asp x
MNFSR: http:// www.mnfsr.go v.pk/
Technical Barriers to Trade (TBT) notification
Pakistan Standards and Quality Control Authority
Information on Pakistan’s TBT notifications submitted to WTO.
http://psqca.com.pk/NEP/%5b2%5d%20Pakistan%20TBT%20Notification.htm
Customs clearance system
Web Based One Customs (WeBOC 1) - Federal Board of Revenue

WeBOC 1 is FBR’s online system for filing goods declaration forms for import and
export cargo, which can be used by importers, exporters and customs clearing
agents.
https://fbr.gov.pk/categ/customs-tariff/51149/70853/131188
Export and import general manifests
The Export General Manifest (EGM) and Import General Manifest (IGM) of FBR
contain information from Karachi Port and Karachi Port Qasim. It provides information
on companies exporting or importing through the ports and the details about their
goods.
EGM: http://o.fbr.gov.pk/newcu/egm/egm.asp
IGM: http://o.fbr.gov.pk/newcu/igm/igm.asp
Market price Information
Pakistan Bureau of Statistics
Provides wholesale price indexes by major groups and commodities.
http://www. pbs.gov. pk/cpi
58
Business contacts
Pakistan Exporters’ Directory – Trade Development Authority of Pakistan
The directory maintained by TDAP is based on data extracted from Pakistan Customs’
records. It aims to assist foreign buyers in sourcing their requirements from Pakistan.
Provides exporter profiles including products, export performances and contact
information.
Offers an elaborate search facility to users based on following key parameters:
Harmonized System code, product category and company name
htt p://pakistanexportersdi rectory. gov. pk/
Trade leads
Trade Development Authority of Pakistan
Shares information related to potential business opportunities that might be

released in the form of tenders
https://www.tdap.gov.pk/trade-leads.php
Trade finance
State Bank of Pakistan
Information on various SBP incentive schemes
http://www.sbp.org.pk/Incen/index.asp
Trade remedies
National Tariff Commission

Provides information about the imposition of anti-dumping, safeguards and
countervailing duties in the form of notices (in PDF or word format).
Includes pertinent rules and procedures related to trade remedies.
Offers information about relevant trade remedy investigations, segmented by notices,
reports and reviews.
https://ntc.gov.pk/
Export processing zones
Export Processing Zones Authority
Provides details about incentives accorded to exporters and investors and the related
application procedures.
htt p://epza.gov.pk
59
Information on national trade regulations is not business-friendly

Different ministries and governmental bodies provide information about trade regulations through their
websites. This information is usually available in PDF or Word formats. Relevant changes to regulations are
alerted through statutory regulatory notifications in PDF or Word formats. It is quite cumbersome for
exporters and importers to search for the relevant regulations that apply to their products in PDF and Word
formats.
Traders would have to go through all the published statutory regulatory notifications to determine if any
changes had been made to regulations that concern their goods. Moreover, exporters may not know whether
a particular regulation is relevant, as some of them do not provide the related Harmonized System or national
tariff line classification code to which the regulation applies.
Benefits of trade agreements must be better communicated

The Ministry of Commerce provides a list of trade agreements with their statutory texts. However, it is difficult
for exporters to ascertain the benefits these agreements offer because the statutory texts are complex. This
is especially true in the case of SMEs, which cannot afford to hire trade experts to explain how they could
benefit from a trade agreement.
Preferential tariff rates are determined based on product-specific rules of origin. Moreover, traders need to
obtain certificates of origin to profit from a tariff concession. Without easily understandable information, the
benefits that could be gained through a trade agreement may not be realized. Exporters should be given the
latest information on duty savings, detailed rules of origin requirements and certification procedures so they
can make the most of trade agreements.
Scattered information, no trade information portal

The fragmentation of information on different websites is an important issue that must be addressed. To
realize the full trade potential of Pakistan, exporters need the pertinent information that different government
bodies disseminate in various forms.
To support Pakistani exporters and importers, a cumulated database providing information about goods and
destination markets should be designed to enable traders to search for the regulations that are relevant to
their particular products.
Trade information and capacity building have improved

Business associations find that a fair amount of progress has been made in Pakistan to improve trade
information and build the capacity of companies. Although 30% were dissatisfied with the efforts made over
the last five years, 30% reported good or excellent progress and 40% said progress had been satisfactory
(Figure 35).
One of the biggest obstacles in this area is difficulty following the various changes and new developments
that take place (as trade policy and tax laws are frequently updated). Although policy information is made
available online through the Federal Board of Revenue website, it is difficult for traders to understand how it
is interpreted, how it applies to them and the implications for their businesses. This information contains
references to various statutory regulatory orders, acts and ordinances, and the legal language itself is difficult
to comprehend.
The Federal Board of Revenue has updated its information portal, which now offers more information about
taxes and rebates. However, it still has a long way to go before it is as useful as it should be, because the
information that is made available is too complex for companies to digest and is not industry-specific. There
is no segregated data on exports, forecasts, trends and indexes.
Web portals of other government agencies are not up to date and businesses have observed that the
procedures typically differ from those shown on the website.
60
Figure 35 Most business associations say availability of trade information has improved
Satisfactory
40%
Good Poor
15% 30%
Excellent
15% Rating of business associations on
improvements in trade information in
Pakistan since 2014
61
CHAPTER 4 RECOMMENDATIONS
© Shutterstock
The NTM survey reveals various obstacles, especially in relation to export-quality management and
infrastructure that must be addressed to make it easier for Pakistani traders to comply with regulations.
The following policy recommendations followed consultations with stakeholders from the public and private
sectors, business association representatives and experts. These recommendations are also in line with
ITC’s action plan aimed at supporting small businesses in developing countries affected by the COVID-19
crisis.54 The survey results and recommendations aim to help the government and private sector create an
enabling environment for private-sector development and improve export competitiveness in Pakistan.
Improve transparency in trade

Access to trade and market intelligence is critical to export success. However, companies in Pakistan often
lack the resources and skills to obtain and process trade-related information. This places exporters at a
disadvantage compared with competitors in other countries.
Develop a business process guide

Pakistan needs a reliable source and proper dissemination of information for exporters and importers. A
business process guide should be developed for the trade information portal. This tool should make it easy
for exporters that are unfamiliar with the process involved – especially newer companies – to understand the
way forward.
The guide should list administrative procedures related to compliance with regulations (e.g. certification of
origin, export and import registration) for different products. It should also include other necessary details,
such as costs and waiting time.
54
http://www.intracen.org/covid19/15-Points-Action-Plan/
62
Implement and train entrepreneurs on notification alert mechanisms

Pakistan should implement a mechanism to which SMEs can subscribe to receive alerts (e.g. by e-mail or
text message) about information updates for markets and goods in which they are interested. The tool should
also forewarn traders of WTO notifications about upcoming changes in SPS and TBT measures. This would
require a customized local interface with a new global notifications alert system.
The mechanism should enable traders to send their feedback on proposed changes to SPS or TBT measures
back to the WTO via the national focal point. Workshops should be organized to train SMEs, business
associations and national institutions on how to best use this tool.
Establish an online reporting mechanism and monitoring committee

Small and medium-sized enterprises in Pakistan struggle with market regulations and trade procedures when
they export or import goods. Yet there is no simple channel to collect and examine their concerns so the
relevant institutions can coordinate actions to overcome these obstacles.
An online platform should be developed to monitor and address difficulties faced by exporters and importers.
SMEs should be able to share their concerns and directly question relevant agencies about the challenges
they face – for example, when trying to prove conformity with product quality and food safety requirements.
In addition to the online portal, it is necessary to create an institutional mechanism to ensure the continuity
of communication between the public and private sector, and improve the business environment. The
mechanism could be linked with the national Trade Facilitation Committee to ensure the cooperation of
different actors (policymakers and trade and investment support institutions) to address NTM-related trade
obstacles and to interact with companies.
Create a regional trade facilitation mechanism

NTM Desk was an initiative to disseminate information on market access conditions in SAARC countries.
The programme was suspended and replaced by consultative meetings that gather different stakeholders
who take stock of the current regulatory situation in the region. NTM Desk should be reactivated as a hub to
identify and resolve issues that affect exporters across SAARC countries.
Develop an effective trade information portal

There is no trade information portal in Pakistan for exporters and importers. Rather, information about trade
and markets is fragmented among different websites.
A trade information portal should be created so Pakistani companies can obtain the information they need
to enter and compete in the international market. This portal should be designed based on the target
audiences – Pakistani traders and the international business community – and should aim to satisfy the
needs of both groups. It would be one-stop shop for all trade-related information, including trade statistics,
tariffs and non-tariff measures, standards, procedures, contact points, news and events.
Upgrade domestic quality infrastructure and compliance

The NTM survey highlighted a significant absence of testing and certification services in Pakistan. Better
export-quality management and infrastructure are vital, given the critical role they play in the success of
Improve the testing and inspection infrastructure

The infrastructure regime encompassing the Pakistan National Accreditation Council, preshipment
inspection bodies and laboratories must be improved. In particular:
 Budgetary constraints at public laboratories need to be addressed to improve the efficiency and
quality of the services they offer. The strong commitment of the Government to this issue is
important.
63
 Staff capacity must be enhanced continuously to ensure that workers are competent in the methods
required for quality-related and food safety tests.
 Local providers of proficiency tests must be upgraded so they can assess the performance of
individual laboratories, as well as specific tests and measurements. Three bodies now offer very
limited proficiency testing in Pakistan. Proficiency test providers also need to be accredited to ensure
they comply with ISO/IEC 17043.
 Technologies must be developed so laboratories can meet new testing requirements and improve
their services.
 A lab information system should be put in place to manage activities such as inputting, processing
and storing data. Most public labs do not use compatible systems. They still generate reports on
paper, which involves lengthy verification procedures and time-consuming manual movement of
information.
 A system to report incidents of noncompliance should be created. No such system exists in Pakistan
today. Regulatory bodies should establish a centralized system to report noncompliance, which
would serve food safety objectives more holistically.
Sound scientific grounds are needed

Research into sanitary and phytosanitary threats is needed to identify the precise requirements of a particular
product. For example, in case of ensuring SPS compliance for MRL limit of pesticide in a particular vegetable,
no definite group of pesticide is known to be tested for compliance. Rather, only commonly used pesticides
are tested. In many cases, only microbiological or mycotoxin analyses are deemed acceptable, even though
the maximum residue limit should be scrutinized.
Better mechanisms to check pesticides are vital

The mechanisms used to examine pesticides and fertilizers should be improved to find those of low quality.
These mechanisms should cover pesticides that are imported as well as those sold in provinces.
Harmonize the work of provincial and federal authorities

The activities of provincial and federal authorities should be harmonized to guarantee effective compliance
with sanitary and phytosanitary rules. Provincial agriculture departments regulate pesticide registration and
usage, and synchronizing their operations with those of DPP is necessary to ensure that fruit and vegetable
consignments do not breach maximum residue limits.
Enhance controls at farms

The current approach to plant and animal health conformity is based primarily on testing of finished products.
The authorities, including quarantine departments, cannot address health issues at farms. More scrutiny of
crops and livestock is needed at Pakistani farms to enhance quality and safety.
Better plant health management is also necessary, starting with pest-risk analysis. Expanding the capacity
of DPP and adopting a risk-based approach during inspections for pests would facilitate border control.
Improve the infrastructure of SPS control departments

DPP and PQD lack adequate staff, equipment and training, which can affect the quality of service they
provide. These problems lead to delays in service delivery, competence deficiencies and a lack of scientific
decision-making. Adequate resources should be provided to DPP and PQD to enhance their human capital
and infrastructure.
Harmonize regulations for import, export and local sale

Provincial food authorities work under their respective laws and their food safety domain extends only to
their geographical boundaries. At the federal level, PSQCA regulates the quality of around 40 packaged food
items, as per its mandate. The food authorities in provinces must remain aware of this mandate.
64
PSQCA standards usually apply to imported food, but food exports must comply with the rules of importing
countries. These overlaps cause havoc – and not only for the business community.
Harmonizing national standards to international ones would simplify compliance requirements and ensure
higher quality products for domestic consumption. The Government should introduce guidelines to be
followed by the provinces.
Establish a traceability system

Pakistani meat exports have largely been limited to Gulf Cooperation Council countries. Pakistan has been
unable to export meat to major markets such as the European Union or the United States because of strict
meat traceability requirements. Establishing a proper traceability system in the country is essential to access
these markets. Pakistan should initiate a pilot project in a few districts to assess the feasibility of scaling up.
Standardize halal certification

Halal certification laboratories in Pakistan are fragmented. Creating a single halal certification authority would
reduce the time and money that Pakistani exporters invest to get the required certificate showing the
compliance with Islamic law.
Enhance customs infrastructure and procedures

 Pakistan should try to automate most of its customs procedures (especially export promotion
schemes) in light of the provisions of the WTO Trade Facilitation Agreement and the revised Kyoto
Convention.
 Providing more storage facilities and proper warehouses at borders and clearance points would
improve the customs infrastructure. SMEs should be trained on packaging, using available storage
facilities efficiently and guaranteeing that their exports satisfy the relevant requirements.
 A special holding area with cold storage should be set up for perishable items.
 Work should continue on implementation of the national single window. Automation and less
paperwork at government offices and customs would reduce the administrative burdens, time and
costs.
 Staff shortages at Pakistan Customs must be addressed. There must be enough customs officers
to deal efficiently with imports and exports.
 Custom officers dealing with exports should be given proper and relevant training so they can better
understand how money is laundered through exports. This will help them develop expertise and
enforce the law without compromising trade facilitation.
 Provide modern scanners to reduce the need for manual inspections.
 Offer regular training for traders and clearing agents on customs laws, rules and procedures with
the objective of improving compliance.
 Integrate the authorities that issue certificates (such as the Department of Plant Protection, the
Animal Quarantine Department and the Marine Fisheries Department) into WeBOC to avoid forgery
of documents and minimize the risk of non-compliance.
Build capacity and improve competitiveness

 Build the capacity of enterprises to streamline and expand trade. Pakistani firms must be made
aware of trade regulations and procedures. Workshops should include training sessions on topics
such as identifying new markets, understanding market-access conditions, marketing strategies,
supply chain management and advocacy. Equally important is the need to expand the capacity of
government workers to ensure effective and efficient services, eliminate corruption and reduce high
staff turnover.
65
 Review the public sector and legal environment to identify better structures and policies to support
the development of e-commerce in Pakistan. Create strategies to set up e-commerce-related
businesses to offer entrepreneurial opportunities to youth, women and underprivileged communities
by building partnerships with local institutions and private sector partners. Offer training and support
to entrepreneurs on marketing promotions and developing business through e-commerce.
Improve inter-agency communication and collaboration with the private sector

 Frequent interaction among custom officials, exporters, importers and cargo companies would help
improve their relationship and resolve trade-related problems.
 Training and information should be regularly provided to exporters, importers, logistics companies
and customs officials about rules, regulations, bilateral and multilateral treaties, International
Commercial Terms, transfer of risks and ownership, as well as international trade generally.
Streamline export regulations and procedures

 SBP should review the advance payment requirement for imports. This requirement, designed to
regulate outflows of foreign currency, has made it difficult for exporters to import raw materials. The
general business community has reacted positively to the SBP decision in 2019 to allow advance
payment for imports of raw materials and spare parts, but some companies say its policies on
advance payments remain restrictive.
 The Duty and Tax Remission for Exporters initiative requires imported materials to be used within
12 months to avoid duties and taxes. Exporters of fresh fruits and vegetables including kinnows and
mangoes use imported corrugated boxes. Given the seasonal nature of these two products, they
are often not able to use all the boxes they import. Exporters said the 12-month period should be
extended to 24 months so they can use all the boxes they import without having to pay duties.
 The duty drawback process should be improved and made more transparent. Many exporters said
they were unclear about the process and that waiting times were long – indeed, some said their
refunds were delayed for two years. Allowing trade associations to verify the validity of claims before
they are submitted could expedite the processing of claims at local banks and SBP.
Support women enterpreneurs on business and export development

Targeted action to tackle issues that make it difficult for women exporters to succeed would improve the
general business environment in Pakistan and remove some of the burdensome regulations that affect all
trading companies in the country.
Build the capacity of women in product-specific export marketing

Many businesswomen opt not to export because they do not understand the technical requirements and
procedures and are unable to market their products properly. They need proper guidance on making goods
that meet international standards, identifying potential markets and buyers, and finding suitable ways to
promote their products. Training and mentoring with proper follow-ups should be organized to enable women
entrepreneurs to gain the knowledge they need to export successfully.
Improve access to trade finance

Access to finance is a major obstacle for women entrepreneurs. Small loan schemes with low interest rates
and limited collateral could benefit small-scale women-led firms. Communication and access to information
about existing schemes for women should also be improved. In addition, some women-led enterprises may
need additional training to make the best use of the loan schemes and to avoid costly mistakes.
Mainstream gender in trade policy

Pakistan should mainstream gender in trade policy by promoting equitable and inclusive outcomes in export-
led strategies. Interaction between the Ministry of Commerce and the Ministry of Women Development
66
should be improved in an effort to develop a coherent strategy for the socioeconomic development of women
through cross-border trade.
Upgrading the capacity of chambers of commerce focusing on women and related business associations
would strengthen their efforts to support their members and make it easier for them to inform the relevant
authorities of their needs and the constraints they face.
Encourage businesswomen to formalize trade

For a variety of reasons, many women entrepreneurs prefer to use informal channels to engage in cross-
border trade. Informal trading means that businesswomen cannot use banks to transfer money, which leads
them to turn to systems such as hundi. Businesswomen must be encouraged to formalize their trade – for
instance, through training on customs procedures and by better communicating the benefits. This will not
only help enterprises overcome risks associated with informal trade, but it will also help better represent the
true contribution of Pakistani women to trade.
Develop women clusters and a portal to market their goods

Most enterprises headed by women are small, so developing clusters could help them scale up production
to meet demand, consolidate cargo to benefit from better shipping rates, share ideas and support each other.
Efforts should also be made to connect women-led SMEs to international buyers through global digital
commerce. Training women on using the online marketplace to sell their products effectively is a viable
option. Alternatively, a dedicated online portal for Pakistani women-led enterprises could be developed to
highlight their offerings and connect them to potential clients.
Sensitize staff in public agencies and trade support institutions to better support women
Women entrepreneurs say that staff at various agencies and associations have harassed and treated them
unfairly. It is essential to sensitize all staff to gender equality and the fair treatment of women.
67
APPENDICES
Appendix I Non-tariff measures surveys: global methodology

Non-tariff measure surveys an impact on market access and keep firms from seizing the
trade opportunities created by globalization.
Since 2010,55 ITC has completed large-scale company-level
surveys on burdensome non-tariff measures and related trade
obstacles (NTM surveys hereafter) in over 70 countries on all An overview of previous research and evaluation
continents.56 The main objective of the NTM surveys is to
capture how businesses perceive burdensome NTMs and In the literature, different methods have been used to evaluate
other obstacles to trade at a detailed level – by product and the effects of NTMs. An early approach employed a concept of
partner country. incidence with NTM coverage ratios. Such studies rely on
extensive databases mapping NTMs per product and applying
country. The largest database of official government-reported
All surveys are based on a global methodology consisting of a
NTMs used to be the Trade Analysis and Information System
core part and a country-specific part. The core part of the NTM
published by the United Nations Conference on Trade and
survey methodology described in this appendix is identical in
Development (UNCTAD), but data has been incomplete and
all survey countries, which enables cross-country analyses
updates irregularly.
and comparison. The country-specific part of the survey allows
flexibility in addressing the requirements and needs of each
participating country. In a multi-agency effort, ITC, UNCTAD and the World Bank are
collecting data for a global NTM database with a focus on
technical barriers to trade and sanitary and phytosanitary
The growing role of non-tariff measures in trade standards. The ITC Market Access Map features information
on NTMs. However, as complete as the database may be, it
Over several decades, trade liberalization has been used as a reveals little about the impact of NTMs on the business sector
development tool based on evidence that benefits accrue to nor does it provide information about related POs.
countries actively engaged in world trade. Multilateral, regional
and bilateral trade negotiations as well as non-reciprocal
concessions have led to a remarkable reduction in global, Scope and coverage of the non-tariff measure (NTM)
average tariff protection. With favourable market access surveys
conditions, international trade has soared to previously unseen
levels, raising overall welfare and standards of living. The objective of the NTM surveys require a representative
sample allowing for the extrapolation of the survey result to the
country level. To achieve this objective, the NTM survey covers
The misuse of NTMs may undermine the impact of falling
at least 90% of the total export value of each participating
tariffs. The sound use of NTMs to ensure consumer health,
country (excluding minerals and arms). The economy is
protect the environment and safeguard national security is
divided into 13 sectors, and all sectors with more than a 2%
legitimate. However, evidence suggests that countries are
share in total exports are included in the survey.
resorting to NTMs as alternative mechanisms to protect
domestic industries. NTMs have been negotiated within the
General Agreement on Tariffs and Trade and at the World The NTM survey sectors are defined as follows:
Trade Organization (WTO) since the Tokyo Round (1973–
1979) and are increasingly dealt with in regional and bilateral 1. Fresh food and raw agro-based products
trade agreements. Many practitioners consider they have 2. Processed food and agro-based products
surpassed tariffs in their trade-impeding effect. 3. Wood, wood products and paper
4. Yarn, fabrics and textiles
NTMs particularly impact exporters and importers in 5. Chemicals
developing and least developed countries (LDCs) that struggle 6. Leather
with complex requirements. Firms in these countries often 7. Metal and other basic manufacturing
have inadequate domestic trade-related infrastructure and 8. Non-electric machinery
face administrative obstacles. NTMs that would not normally 9. Computers, telecommunications and consumer
be considered very restrictive can represent major burdens in electronics
LDCs. In addition, the lack of export support services and 10. Electronic components
insufficient access to information on NTMs impede the 11. Transport equipment
international competitiveness of firms. As a result, both NTMs 12. Clothing
applied by partner countries as well as domestic burdens have 13. Miscellaneous manufacturing
55
The work started in 2006, when the Secretary-General of the United Nations Conference on Trade and Development (UNCTAD)
established the Group of Eminent Persons on Non-Tariff Barriers. The main purpose of the group was to discuss the definition,
classification, collection and quantification of non-tariff barriers – to identify data requirements, and consequently advance
understanding of NTMs and their impact on trade. To carry out the technical work of the group, a Multi-Agency Support Team was
set up. Since then, ITC is advancing the work on NTMs in three directions. First, ITC has contributed to the international classification
of non-tariff measures (NTM classification) that was finalized in November 2009 and updated in 2012. Second, ITC undertakes NTM
surveys in developing countries using the NTM classification. Third, ITC, UNCTAD and the World Bank jointly collect and catalogue
official regulations on NTMs applied by importing markets (developed and developing). This provides a complete picture of NTMs as
official regulations serve as a baseline for the analysis, and the surveys identify the impact of the measures on enterprises and
consequently on international trade.
56
Pilot NTM Surveys were carried out in cooperation with UNCTAD in 2008–2009 in Brazil, Chile, India, the Philippines, Thailand,
Tunisia and Uganda. The pilot surveys provided a wealth of materials allowing for the significant improvement to both the NTMs
classification and the NTM survey methodology. Since then, ITC has implemented NTM surveys based on the new methodology in
over 70 countries.
68
Companies trading arms and minerals are excluded. The identifies all products affected by burdensome regulations and
export of minerals is generally not subject to trade barriers due countries applying these regulations.
to a high demand and the specificities of trade undertaken by
large multinational companies. The export of arms is outside During the third part of the interview, each problem is recorded
of the scope of ITC activities. in detail. A trained interviewer helps respondents identify the
relevant government-imposed regulations, affected products,
The NTM surveys cover companies exporting and importing the partner country exporting or importing these products, and
goods. Companies trading services are excluded, as a survey the country applying the regulation (partner, transit or home
on NTMs in services would require a different approach and country).
methodology. The NTM survey includes companies
specialized in the export-import process and services, such as Each burdensome measure (regulation) is classified according
agents, brokers, and forwarding companies (referred to to the NTM classification, an international taxonomy of NTMs,
collectively as ‘trading agents’). These companies can be consisting of over 200 specific measures grouped into 16
viewed as service companies because they provide trade categories (see Appendix II). The NTM classification is the
logistics services. The answers provided by trading agents are core of the survey, making it possible to apply a uniform and
in most cases analysed separately from the answers of the systematic approach to recording and analysing burdensome
companies that export their own products. NTMs in countries with idiosyncratic trade policies and
approaches to NTMs.
The NTM surveys cover legally registered companies of all
sizes and types of ownership. Depending on country size and The face-to-face questionnaire captures the type of
geography, one to four geographic regions with high burdensome NTMs and the nature of the problem (so-called
concentrations of economic activities (high number of firms) POs explaining why the measures represent an impediment),
are included in the sample. the place where each obstacle takes place, and the agencies
involved, if any. For example, an importing country can require
the fumigation of containers (NTM applied by the partner
Two-step approach
country), but fumigation facilities are expensive in the exporting
country, resulting in a significant increase in export costs for
The representatives of the surveyed companies, generally the company (POs located in the home country). The
export/import specialists or senior-level managers, are asked companies can also report generic problems unrelated to any
to report trade-related problems experienced by their regulation, but affecting their exports or imports, such as
companies in the preceding year that represent a serious corruption and lack of or inadequate export infrastructure.
impediment for their operations. To identify companies that These issues are referred to as problems related to business
experience burdensome NTMs, the survey process consists of environment (see Appendix III).
telephone interviews with all companies in the sample (Step 1)
and face-to-face interviews undertaken with the companies
that reported difficulties with NTMs during the telephone Partnering with a local survey company
interviews (Step 2).
A local partner selected through a competitive bidding
procedure carries out the telephone interviews and face-to-
Step 1: Telephone interviews
face interviews. The partner is usually a company specializing
in surveys. Generally, the NTM surveys are undertaken in local
The first step includes short telephone interviews. Interviewers languages. The telephone interviews are recorded either by a
asked respondents to identify the main sector of activity of their Computer Assisted Telephone Interview system, computer
companies and the direction of trade (export or import). The spread sheets or on paper. The face-to-face interviews are
respondents are then asked whether their companies have initially captured using paper-based interviewer-led
experienced burdensome NTMs. If a company does not report questionnaires that are then digitalized by the partner company
any issues with NTMs, the interview is terminated. Companies using a spread sheet-based system developed by ITC.
that report difficulties with NTMs are invited to participate in an
in-depth face-to-face interview.
Gallup Pakistan implemented the survey in Pakistan on behalf
and under the guidance of ITC.
Step 2: Face-to-face interviews
Open-ended discussions
The second-step interviews are required to obtain all the
details of burdensome NTMs and other obstacles at the
During the surveys of companies and preparation of the report,
product and partner country level. These interviews are
open-ended discussions are held with national experts and
conducted face-to-face due to the complexity of the issues
stakeholders, for example trade support institutions and
related to NTMs. Face-to-face interactions with experienced
sector/export associations. These discussions provide further
interviewers helps to ensure that respondents from companies
insights, quality checks and validation of the NTM survey
correctly understand the purpose and the coverage of the
results. The participants review the main findings of the NTM
survey, and accurately classify their responses in accordance
survey and help to explain the reasons for the prevalence of
with predefined categories.
the issues and propose possible solutions.
The questionnaire used to structure face-to-face interviews
consists of three main parts. The first part covers the Confidentiality
characteristics of the companies: number of employees,
turnover and share of exports in total sales, whether the The NTM survey is confidential. Confidentiality of the data is
company exports its own products or represents a trading paramount to ensure the greatest degree of participation,
agent providing export services to domestic producers. integrity and confidence in the quality of the data. The paper-
based and electronically captured data is transmitted to ITC at
The second part is dedicated to exporting and importing the end of the survey.
activities of the company, with all trade products and partner
countries recorded. During this process, the interviewer also
69
Sampling technique size and the structure of the economy, availability and quality
of the business register and the response rate. The sample
The selection of companies for the phone screen interviews of size for the face-to-face interviews depends on the number of
the NTM survey is based on the stratified random sampling. In affected companies and their willingness to participate.
a stratified random sample, all population units are first
clustered into homogeneous groups (‘strata’), according to
Pakistan business registry
predefined characteristics, chosen to be related to the major
variables being studied. In the NTM surveys, companies are
stratified by sector, as the type and incidence of NTMs are Prior to the survey, ITC compiled a registry of more than
often product-specific. Then simple random samples are 12,000 active exporters in Pakistan, containing information on
selected within each sector. the type of products imported or exported by companies,
together with their contact details. This registry was used to
calculate the sample size and contact the companies for
The NTM surveys aim to be representative at the country level.
interviews.
A sufficiently large number of enterprises should be
interviewed within each export sector to ensure that the share
of enterprises experiencing burdensome NTMs is estimated Trade Development Authority of Pakistan provided information
correctly and can be extrapolated to the entire sector. To on more than 11,500 companies. Additional contacts were
achieve this objective, a sample size for the telephone obtained from Islamabad Chamber of Commerce and Industry,
interviews with exporting companies is determined Karachi Chamber of Commerce and Industry, Lahore
independently for each export sector.57 Chamber of Commerce and Industry, All Pakistan Meat
Exporters & Processors of Pakistan (APMEPA) and All
Pakistan Fruit & Vegetable Exporters, Importers & Merchants
For importing companies, the sample size is defined at the
Association (PFVA), among others.
country level. The sample size for importing companies can be
smaller than the sample size for exporters, mainly for two
reasons. First, the interviewed exporting companies are often Survey data analysis
import intermediaries and provide reports on their experiences
with NTMs as both exporters and importers. Second, problems The analysis of the survey data consists of constructing
experienced by importing companies are generally linked to frequency and coverage statistics along several dimensions,
domestic regulations required by their home country. Even with including product and sector, NTMs and their main NTM
a small sample size for importing companies, the effort is made categories (for example, technical measures, quantity control
to obtain a representative sample by import sectors and the measures), and various characteristics of the surveyed
size of the companies. companies (for example, size and degree of foreign
ownership).
Exporting companies have difficulties with both domestic
regulations and regulations applied by partner countries that The frequency and coverage statistics are based on ‘cases’. A
import their products. Although the sample size is not stratified case is the most disaggregated data unit of the NTM survey.
by company export destinations, a large sample size permits a By construction, each company participating in a face-to-face
good selection of reports related to various export markets interview reports at least one case of burdensome NTMs, and,
(regulations applied by partner countries). By design, large if relevant, related POs and problems with the trade-related
trading partners are mentioned more often during the survey business environment.
because it is more likely that the randomly selected company
would be exporting to one of the major importing countries. Each case of each company consists of one NTM (a
government-mandated regulation, for example a sanitary and
The sample size for face-to-face interviews depends on the phytosanitary certificate), one product affected by this NTM,
results of the telephone interviews. and partner country applying the reported NTM. For example,
if there are three products affected by the same NTM applied
Average sample size by the same partner country and reported by one company,
the results would include three cases. If two different
companies report the same problem, it would be counted as
The number of successfully completed telephone interviews
two cases.
can range from 150 to 1,000, with subsequent 150 to 300 face-
to-face interviews with exporting and importing companies.
The number of telephone interviews is mainly driven by the The scenario where several partner countries apply the same
type of measure is recorded as several cases. The details of
57
The sample size depends on the number of exporting p: The estimated proportion of an attribute that is
companies per sector and on the assumptions regarding the present in the population. In the case of the
share of exporting companies that are affected by NTMs in NTM survey, it is a proportion of companies
the actual population of this sector. The calculation of a that experience burdensome NTMs. As this
sample size will be based on the equation below (developed proportion is not known prior to the survey, the
by Cochran, 1963) to yield a representative sample for most conservative estimate leading to a large
proportions in large populations (based on the assumption of sample size is employed, that is p=0.5.
normal distribution). d: Acceptable margin of error for the proportion
t 2*p(1  p)*N being estimated. In other words, a margin of
n error that the researcher is willing to accept. In
d *N  t 2*p(1  p)
2
the case of NTM survey d=0.1.
Where
Source: Cochran, W. G. 1963. Sampling Techniques, 2nd
no : Sample size for large populations Ed., New York: John Wiley and Sons, Inc.
t: t-value for selected margin of error (d). In the
case of the NTM Survey 95% confidence
interval is accepted, so t-value is 1.96.
70
each case (e.g. the name of the government regulations and company-level survey, but unfortunately it is often unavailable,
its strictness) can vary, as regulations mandated by different even in the advanced developing countries.
countries are likely to differ. However, if the home country of
the interviewed companies applies an NTM to a product ITC invests much time, effort and resources into constructing
exported by a company to several countries, the scenario will a national business register of exporting and importing
be recorded as a single NTM case. When an interviewed companies. The initial information is obtained with the help of
company both exports and imports, and reports cases related national authorities and other stakeholders (for example,
to both activities, it is included in the analysis twice – once for sectoral associations). In cases where it is not available from
the analysis of exports and once for the analysis of imports. government sources or a sectoral association, ITC purchases
The distinction is summarized in the Table below. information from third companies, and in certain cases
digitalizes it from paper sources. The information from various
sources is then processed and merged into a comprehensive
Dimensions of an NTM case
list of exporting and importing companies.
Country applying Upon completion of the NTM Survey, the local partner
company is fully capable of independently implementing a
Dimensions Home country Partner countries follow-up survey or other company-level surveys as it is
(where survey and transit equipped with the business register and trained on the survey
is conducted) countries
methodology as well as trade and NTM-related issues.
Reporting company
Caveats
Affected product
The utmost effort is made to ensure the representativeness
(HS 6-digit code or
national tariff line) and the high quality of the NTM Survey results, yet several
caveats must be kept in mind.
Applied NTM
(measure-level code
from the NTM First, the NTM Surveys generate perception data, as the
classification) respondents are asked to report burdensome regulations
representing a serious impediment to their exports or imports.
Trade flow The respondents may have different scales for judging what
(export or import) constitutes an impediment. The differences may further
intensify when the results of the surveys are compared across
Partner country countries, stemming from cultural, political, social, economic
applying the measure and linguistic differences. Some inconsistency may be
possible among interviewers. For example, these are related
to matching reported measures against the codes of the NTM
Cases of POs and problems with the business environment are classification due to the complex and idiosyncratic nature of
counted in the same way as NTM cases. The statistics are NTMs.
provided separately from NTMs, even though in certain
instances they are closely related. For example, delays can be Second, in many countries a systematic business register
caused by the preshipment inspection requirements. As many covering all sectors is not available or incomplete. As a result,
of the POs and problems with the business environment are it may be difficult to ensure random sampling within each
not product specific, the statistics are constructed along two sector and a sufficient rate of participation in smaller sectors.
dimensions: type of obstacles and country where they occur, Whenever this is the case, the NTM survey limitations are
as well as agencies involved. explicitly provided in the corresponding report.
Enhancing local capacities Finally, certain NTM issues are not likely to be known by the
exporting and importing companies. For example, exporters
The NTM surveys enhance national capacities by transmitting may not know the demand-side constraints behind the borders.
skills and knowledge to a local partner company. ITC does not An example is ‘buy domestic’ campaigns. The scope of the
implement the NTM surveys, but guides and supports the local NTM survey is limited to legally operating companies and does
survey company and experts. not include unrecorded trade, for example shuttle traders.
Before the start of the NTM survey, the local partner company, Following up on the ITC Non-Tariff Measure Survey
including project managers and interviewers are fully trained
on the different aspects of the NTMs, the international NTM The findings of each ITC NTM Survey are presented and
classification and the ITC NTM Survey methodology. ITC discussed at a stakeholder workshop. The workshop brings
representatives stay in the country for the launch of the survey together government officials, experts, companies, donors,
and initial interviews, and remain in contact with the local non-governmental organizations (NGOs) and academics. It
partner during the entire duration of the survey, usually around fosters a dialogue on NTM issues and helps identify possible
six months, to ensure a high quality of survey implementation. solutions to the problems experienced by exporting and
ITC experts closely follow the work of the partner company and importing companies.
provide regular feedback on the quality of the captured data
(including classification of NTMs) and the general The NTM survey results serve as a diagnostic tool for
development of the survey, which helps the local partner to identifying and solving predominant problems. These
overcome any possible problems. problems can be addressed at the national or international
level. The NTM survey findings can also serve as a basis for
ITC also helps to construct a business register (list of exporting designing projects to address the challenges identified and for
and importing companies with contact details), which remains supporting fundraising activities.
at the disposal of the survey company and national
stakeholders. The business register is a critical part of any
71
Appendix II Non-tariff measures classification

Importing countries are very idiosyncratic in the ways they Chapter F – Finance Measures
apply non-tariff measures (NTMs). This called for an Measures that are intended to regulate the access to and cost
international taxonomy of NTMs, which was prepared by the of foreign exchange for imports and define the terms of
Multi-Agency Support Team, a group of technical experts from payment. They may increase import costs in the same manner
eight international organizations, including the Food and as tariff measures.
Agricultural Organization of the United Nations, the
International Monetary Fund, ITC, the Organisation for Chapter G – Price-Control Measures
Economic Co-operation and Development, the United Nations
Conference on Trade and Development, the United Nations Measures implemented to control the prices of imported
Industrial Development Organization, the World Bank and articles in order to: support the domestic price of certain
WTO. It is used to collect, classify, analyse and disseminate products when the import price of these goods is lower;
information on NTMs received from official sources such as establish the domestic price of certain products because of
government regulations. price fluctuation in domestic markets, or price instability in a
foreign market; and counteract the damage resulting from the
For the purpose of the large-scale company surveys on NTMs, occurrence of ‘unfair’ foreign trade practices.
ITC uses a simplified version of this international classification.
Chapter H – Anti-Competitive Measures
The NTM classification for surveys differentiates measures Measures intended to grant exclusive or special preferences
according to 16 chapters (denoted by alphabetical letters, see or privileges to one or more limited groups of economic
below), each comprising sub-chapters (denoted by two letters) operators.
and the individual measures (denoted by two letters and a
number). The following sketches the content of each of the 16 Chapter I – Trade-Related Investment Measures
chapters. Measures that restrict investment by requesting local content,
or requesting that investment be related to export to balance
Chapter A – Technical Regulations imports.
Product-related requirements that are legally binding and set
by the importing country. They define the product Chapter J – Distribution Restrictions
characteristics, technical specifications of a product or the Restrictive measures related to the internal distribution of
production process and post-production treatment and imported products.
comprise the applicable administrative provisions, with which
compliance is mandatory. Technical requirements include
Chapter K – Restrictions on Post-Sales Services
sanitary and phytosanitary measures, which are generally
implemented to protect human, animal and plant life, and Measures restricting the provision of post-sales services in the
health. importing country by producers of exported goods.
Chapter B – Conformity Assessment Chapter L – Subsidies

Measures determining whether a product or a process Measures related to financial contributions by a government or
complies with the technical requirements specified under government body to a production structure, be it a particular
Chapter A. It includes control, inspection and approval industry or company, such as direct or potential transfer of
procedures – such as testing, inspection, certification and funds (e.g. grants, loans, equity infusions), payments to a
traceability – which confirm and control that a product fulfils the funding mechanism and income or price support.
technical requirements and mandatory standards imposed by
the importing country, for example to safeguard the health and Chapter M – Government Procurement Restrictions
safety of consumers. Measures controlling the purchase of goods by government
agencies, generally by preferring national providers.
Chapter C – Preshipment Inspection and Other Formalities
Practice of checking, consigning, monitoring and controlling Chapter N – Intellectual Property
the shipment of goods before or at entry into the destination Measures related to intellectual property rights in trade.
country. Intellectual property legislation covers patents, trademarks,
industrial designs, layout designs of integrated circuits,
Chapter D – Charges, Taxes and Other Para-tariff Measures copyright, geographical indications and trade secrets.
Measures other than tariffs that increase the cost of imports in
a similar manner, i.e. by a fixed percentage or by a fixed Chapter O – Rules of Origin
amount. They are also known as para-tariff measures. Covers laws, regulations and administrative determinations of
Customs surcharges and general sales taxes are examples. general application applied by the governments of importing
countries to determine the country of origin of goods.
Chapter E – Licences, Quotas, Prohibitions and Other
Quantity Control Measures Chapter P – Export-related Measures
Measures that restrain the quantity of goods that can be Encompasses all measures that countries apply to their
imported, regardless of whether they come from different exports. It includes export taxes, export quotas or export
sources or from one specific supplier. These measures can prohibitions, among others.
take the form of restrictive licensing, fixing of a predetermined
quota or through prohibitions.
72
The structure of the NTM classification for ITC surveys
Source: International Trade Centre, NTM classification adapted for ITC surveys, 2015 (unpublished document).
73
Appendix III Procedural obstacles
Following is a list of POs related to compliance with non-tariff measures and to an inefficient trade-related business
environment and infrastructure.
Administrative burdens related to regulations

A A1. Large number of different documents
A2. Documentation is difficult to fill out
A3. Difficulties with translation of documents from or into other languages
A4. Numerous administrative windows/organizations involved, redundant documents
Information or transparency issues

B B1. Information on selected regulation is not adequately published and disseminated
B2. No due notice for changes in selected regulation and related procedures
B3. Selected regulation changes frequently
B4. Requirements and processes differ from information published
Discriminating behaviour of officials

C C1. Arbitrary behaviour of officials regarding classification and valuation of the reported
product
C2. Arbitrary behaviour of officials with regards to the reported regulation
Time constraints
D D1. Delay related to reported regulation
D2. Deadlines set for completion of requirements are too short
Informal or unusually high payments

E E1. Unusually high fees and charges for reported certificate/regulation
E2. Informal payment, e.g. bribes for reported certificate/regulation
Lack of sector-specific facilities

F F1. Limited/inappropriate facilities for testing
F2. Limited/inappropriate facilities for sector-specific transport and storage,
e.g. cold storage, refrigerated trucks
F3. Other limited/inappropriate facilities, related to reported certificate/regulation
Lack of recognition or accreditations

G G1. Facilities lacking international accreditation/recognition
G2. Other problems with international recognition,
e.g. lack of recognition of national certificates
Other procedural obstacles

H H1. Other procedural obstacles
74
Appendix IV Project timeline and stakeholder consultation
Timeline of NTM Business Survey implementation in Pakistan
March – June 2019 17 July 2019 June 2020

Survey implementation: National Stakeholder Publication of the
1200 companies meeting in Islamabad. country report
interviewed Public sector inputs.
February 2019 May – July 2019 July– December 2019

Training of Quality control of data Additional research and
interviewers. First analysis of data drafting of report.
Outreach to business Consultation with public sector
associations and experts
Agenda of National Stakeholder Meeting in Pakistan
17 July 2019 - Islamabad, Pakistan
08:30 Registration
09:00 Opening remarks
• Mr Muhammad Ashraf, Director General (Trade Policy), Ministry of Commerce
• Mr Gonzalo Varela, Senior Economist, World Bank
• Mr. Mondher Mimouni, Chief (TMI), International Trade Centre
Session 1 - Background and overview of results
The ITC will outline the survey implementation and key findings. It will present the companies’
perceptions of NTMs and the challenges they represent to trade.
09:15 Overview on ITC Project on Non-Tariff Measures (NTMs) and implementation of survey in
Pakistan
• Mr. Mondher Mimouni, Chief (TMI), International Trade Centre
09:30 Results of the survey: companies’ perception on NTMs
• Mr. Samidh Shrestha, Analyst, International Trade Centre
10:30 Questions & answers
Session 2 - Thematic round tables
Participants will be invited to share their views and experiences on NTM-related barriers and policy
options to address them in the three selected themes. Each focus group will establish a roadmap with
priority actions to overcome the identified obstacles
11:15 Parallel roundtable sessions:
• Round table 1: Technical requirements, standards and conformity assessment.
• Round table 2: Rules of origin, customs procedures and other border clearance issues
13:00 Concluding Remarks and Closing
• ITC, Ministry of Commerce, World Bank
75
Appendix V Laboratories in Pakistan for food testing
Chemical testing laboratories for fruits and vegetables
biological
Pesticide
hydrates
Moisture
residues
analysis
Protein
Laboratories
Carbo-
metals
Heavy
Micro-
Fiber
Fat
PCSIR Labs., Karachi ● ● ● ● ● ● ● ●
Qarshi Research Int. Labs.

- ● ● ● ● ● ● ●
Pvt. Ltd. Hattar
SGS Pakistan, Karachi - ● ● ● ● ● ● ●
PCSIR Labs. Complex,

- ● ● ● ● ● ● ●
Peshawar

● ● ● ● ● ● ● ●
Lahore
Industrial Analytical Center,

● ● ● ● ● ● ● ●
ICCBS, Karachi
Intertek Pakistan, Karachi - ● ● ● ● ● ● ●
Grain Quality Testing Lab.,

- ● ● ● ● ● ● ●
FSRI, PARC, Islamabad
Global Environmental Lab

- ● ● ● ● ● ● ●
Pvt. Ltd. Karachi
Nuclear Institute for

Agriculture and Biology ● ● ● ● ● ● ● ●
(NIAB), Faisalabad

● ● ● ● ● ● ● ●
PARC, Karachi
National Institute for Bio-

technology & Genetic Eng. - ● ● ● ● ● ● ●
(NIBGE), Faisalabad
76
Physical testing laboratories for rice (1/2)

Milling
Rice Classification Other Quality Factors
Degree
kernel length and the
Large Broken Kernel

A combination of the
Small Broken Kernel

Kernel Length/Width
Under-, Well-, Extra

Kernel Length mm
length/width ratio
Medium Broken
Laboratories
Whole Kernel
Well-milled
Head Rice
Kernel
Chips
Ratio
PCSIR, Karachi ● ● ● ● ● ● ● ● ●
Qarshi Research Int. Labs. - - - - - - - - - -
SGS Pakistan, Karachi ● ● ● ● ● ● ● ● ● ●
PCSIR, Peshawar ● ● ● ● ● ● ● ● ● ●
PCSIR, Lahore ● ● ● ● ● ● ● ● ● ●
Industrial Analytical Center,

● ● ● ● ● ● ● ● ● ●
ICCBS, Karachi
Intertek Pakistan, Karachi ● ● ● ● ● ● ● ● ● ●

● ● ● ● ● ● ● ● ● ●
Islamabad

- - - - - - - - - -
Pvt. Ltd. Karachi

Agriculture and Biology - - - - - - - - - -
(NIAB), Faisalabad
Rice Research Institute ● ● ● ● ● ● ● ● ● ●
Bureau Veritas Pakistan

● ● ● ● ● ● ● ● ● ●
Pvt. Ltd., Karachi

● ● ● ● ● ● ● ● ● ●
Karachi

technology & Genetic Eng. - - - - - - - - - -
(NIBGE), Faisalabad
Rice Lab Pakistan Pvt. Ltd.,

● ● ● ● ● ● ● ● ● ●
Karachi
Inspectorate Pakistan Pvt.

Ltd., Karachi & Lahore ● ● ● ● ● ● ● ● ● ●
(Cotecna Inspection)
Romer Lab, Rawalpindi - - - - - - - - - -
Baltic Control Pakistan

● ● ● ● ● ● ● ● ● ●
(Pvt.) Ltd., Karachi
Trading Corp. of Pakistan

● ● ● ● ● ● ● ● ● ●
(TCP)1*
77
Physical testing laboratories for rice (2/2)

Other Types of Specific Defects
Defective Kernels
Rice of Parboiled Rice
Damaged Kernel %
Under Milled Grain

Kernel (Parboiled)
Pecks (Parboiled)
Chalky Kernels %
Immature Kernels
Other Varieties %
Foreign Grains %
(No./100 Grains)
Green Grains %
Heat Damaged
Red Kernels %
Foreign Matter
Un-gelatinized
Laboratories
Red Streaked
Paddy Grains
% (Parboiled)
%Grains %
Kernels %
Kernels %
%
PCSIR, Karachi ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Qarshi Research Int. Labs. - - - - - - - - - - - - - -
SGS Pakistan, Karachi ● ● ● ● ● ● ● ● ● ● ● ● ● ●
PCSIR, Peshawar ● ● ● ● ● ● ● ● ● ● ● ● ● ●
PCSIR, Lahore ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Industrial Analytical
● ● ● ● ● ● ● ● ● ● ● ● ● ●
Center, ICCBS, Karachi
Intertek Pakistan, Karachi ● ● ● ● ● ● ● ● ● ● ● ● ● ●

● ● ● ● ● ● ● ● ● ● ● ● ● ●
Islamabad

- - - - - - - - - - - - - -
Pvt. Ltd. Karachi

Agriculture and Biology - - - - - - - - - - - - - -
(NIAB), Faisalabad
Rice Research Institute ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Bureau Veritas Pakistan

● ● ● ● ● ● ● ● ● ● ● ● ● ●
Pvt. Ltd., Karachi

● ● ● ● ● ● ● ● ● ● ● ● ● ●
Karachi

technology & Genetic Eng. - - - - - - - - - - - - - -
(NIBGE), Faisalabad
Rice Lab Pakistan Pvt.

● ● ● ● ● ● ● ● ● ● ● ● ● ●
Ltd., Karachi
Inspectorate Pakistan Pvt.

Ltd., Karachi & Lahore ● ● ● ● ● ● ● ● ● ● ● ● ● ●
(Cotecna Inspection)
Romer Lab, Rawalpindi - - - - - - - - - - - - - -
Baltic Control Pakistan

● ● ● ● ● ● ● ● ● ● ● ● ● ●
(Pvt.) Ltd., Karachi
Trading Corp. of Pakistan

● ● ● ● ● ● ● ● ● ● ●
(TCP)1*
78
Chemical testing laboratories for rice
(B1+B2+G1 +G2)
Germination testing
Amylose content
Alkali spreading
Microbiological
Total Aflatoxin
Gel consistency
Other Variety
through DNA
GMO testing
Laboratories
Pesticide
Moisture
residues
analysis
Protein
value
Fiber
Fat
PCSIR, Karachi ● ● ● ● - ● ● ● ● ● - - ●
Qarshi Research Int.
Labs. Hattar
- ● - ● - - ● ● ● ● - - -
SGS Pakistan, Karachi ● ● - ● ● - ● ● ● ● - - ●

PCSIR, Peshawar - ● - ● - - ● ● ● ● - -
PCSIR , Lahore - ● ● ● - - ● ● ● ● - -
Center, IKarachi
- ● ● ● - - ● ● ● ● - - -
Intertek Pakistan,
Karachi
- ● - ● - - ● ● ● ● - -
Food Science
Research Institute, - ● ● ● ● ● ● ● ● ● ● ● -
Islamabad
Agriculture and - ● ● ● ● - ● ● ● ● - - -
Biology, Faisalabad
Rice Research
Institute, Kala Shah - - - - ● - - - - - - - ●
Kaku
Bureau Veritas
- - - - - - - - - - - - -
Pakistan, Karachi
Grain Quality Testing
Lab., Karachi
- ● ● ● - - - - - - - - -
National Institute for

Bio-technology &
Genetic Engineering
● - - ● - - - - - - - - -
(NIBGE), Faisalabad
Global Environmental
Lab, Karachi
- - - ● - - ● ● ● ● - - -
Inspectorate Pakistan
Pvt. Ltd., Karachi
- - - - - - - - - - - - -
Romer Lab,
- ● - - - - - - - - - - -
Rawalpindi
Baltic Control
Pakistan, Karachi
- - - - - - - - - - - - -
Trading Corporation of
NA
Pakistan (TCP)
Rice Lab Pakistan Ltd.
Karachi
- - - - - - - - - - - - -
79
Chemical testing laboratories for meat
Residues
biological
Antibiotic
hydrates
Moisture
Analysis
Protein
Laboratories
Carbo-
Metals
Heavy
Micro-
Fiber
Fat
● ● ● ● ● ● ● ●
Karachi*
Qarshi Research Int.

● ● ● ● ● ● ● ●
Labs. Pvt. Ltd. Hattar
SGS Pakistan, Karachi ● ● ● ● ● ● ● ●

● ● ● ● ● ● ●
Peshawar

● ● ● ● ● ● ● ●
Lahore
● ● ● ● ● ● ● ●
Center, ICCBS, Karachi
Intertek Pakistan, Karachi ● ● ● ● ● ● ●

Lab., FSRI, PARC, ● ● ● ● ● ● ●
Islamabad*

● ● ● ● ● ● ●
Pvt. Ltd. Karachi

Agriculture and Biology ● ● ● ● ● ● ● ●
(NIAB), Faisalabad

● ● ● ● ● ● ● -
Lab., PARC, Karachi

technology & Genetic Eng. ● ● ● ● ● ● ● -
(NIBGE), Faisalabad
80
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81
ITC SERIES ON NON-TARIFF MEASURES
Available reports
 Navigating Non-Tariff Measures: Insights from a Business Survey in the European Union (2016)
 Making regional integration work – Company perspectives on non-tariff measures in Arab States (2015)
 How businesses experience non-tariff measures: Survey-based evidence from developing countries (2015)
 Non-Tariff Measures and the fight against malaria: Obstacles to trade in anti-malaria commodities (2011)
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INVISIBLE BARRIERS TO TRADE

In collaboration with Supported by

About the paper

Publisher: International Trade Centre

Title: Pakistan: Invisible barriers. Business perspectives.

Publication date and place: Geneva, June 2020

ITC Document Number: TMI-19-119.E

For more information, contact Samidh Shrestha ([email protected])

For more information on NTM surveys, see www.ntmsurvey.org

Digital image(s) on the cover: © Shutterstock

© International Trade Centre (ITC)

Foreword by the International Trade Centre

Acting Executive Director

Foreword by the World Bank Group

Country Director for Pakistan

ITC acknowledges Gallup Pakistan, which conducted the interviews in Pakistan.

About the paper ii

Understanding non-tariff measures 1

CHAPTER 1 PROFILES OF SURVEYED COMPANIES 8

CHAPTER 2 THE COMPANY PERSPECTIVE 13

CHAPTER 3 THE PUBLIC SECTOR 46

Pakistani trade laws and regulations 46

Improve transparency in trade 62

ITC SERIES ON NON-TARIFF MEASURES 82

Tables and figures

Table 1 Non-tariff measures affect Pakistani exports and imports 14

ANF Anti-Narcotics Force

One in two Pakistani exporters struggles with regulations

Conformity assessment is the top challenge

Asian and European regulations are the most reported

Domestic regulations create obstacles

Women-led enterprises are more affected

Procedures are a major hurdle

The way forward: Quality infrastructure and compliance

Survey sample is representative of Pakistani traders

UNDERSTANDING NON-TARIFF MEASURES

Understanding non-tariff measures

Being ‘defined by what they are not’,3 these

NTMs may be applied NTMsfor maylegitimat

The diversity of non- tariff meas ures

A BUSINESS SURVEY ON NON-TARIFF MEASURES

A business perspective is imperative

Methodology and survey implementation

PAKISTAN’S ECONOMY: THE BIG PICTURE

Agriculture Industry Services

Export value in $ billions

Textile articles; sets; worn clothing and worn textile

Source: ITC Trade Map, 2018.

Figure 3 China and EU provide most Pakistani imports

Import value in $ billions

Mineral fuels, mineral oils and products of their

EU 28 Machinery, mechanical appliances, nuclear reactors,

Japan Rest of the world Organic chemicals (HS 29)

Source: ITC Trade Map, 2018.

Figure 4 EU offers the most duty-free access for Pakistani products

$.2.4 $6.5 Apparel

$1.6 $4.6 Textile fabrics

$1.3 $4.1 Home textiles

$0.9 $2.4 Rice

$0.4 $0.5 Fish and shellfish