• Background
• Research Framework
• In-house Research
• Contractual Research
• Out-Sourced Research
• ON-GOING RESEARCH ACTIVITIES
  • Product and Market Level Studies
  • Market Access, FTAs, PTAs, Regional and Bilateral Trade Agreements
  • Trade in Services
  • Trade and Fiscal Policy
  • Trade and ICT
  • Trade and Macro-Economy

Background

After the government's decision to modify and extend PITAD's organisational structure, its scope of work and mandate, a dynamic research wing of PITAD has started its working since September 2009 to reinforce the research base. It has yet to attain its full staff strength through an on-going hiring process. The activities (on-going as well as planned) of PITAD's research wing have been organised under the following areas. These have been initiated keeping in mind their relevance and usefulness to policy making and implementation, for the Ministry of Commerce on the matters of commerce and international trade. In terms of organisational structure, the research wing is composed of following research staff:-

• Director, Policy and Research

• Director, Trade Policy and Administration

• Joint Director, Monitoring and Evaluation

• Senior Research Associates

• Research Associates/Research Internees

Research Framework

It is pertinent to mention here that three types of research modes are adopted, encouraged and have potential for growth;

In-house Research:

Under the overall leadership of Director General and operational guidance of Director and Joint Director, in-house research is promoted through;

a) Individual Research Papers (IRPs)

The topics are mutually decided amongst the Director, Joint Director, Director (Trade Policy) and the individual, collective researchers on the basis of interest, data availability and policy relevance. The time frame for the completion of IRPs, is 3 to 4 months, and these are also wetted by in- house presentation attended by external experts for improvements and suggestions at the initiating stage.

b) Collective Research

It is an outcome of a team of researchers headed by Director, Joint Director, Director (Trade Policy), one Senior Research Associate and one or more Research Associates. Depending on the nature of the study, its time frame is longer and may extend from 4 to 12 months. The criteria for choosing and approving the topic is similar to the one adopted for IRPs. However, it may involve primary data collection and therefore may take longer for completion.

Contractual Research:

In the past, PITAD in a limited capacity, also undertook contractual research awarded by bi-lateral / multi-lateral agencies and other government ministries. In a comprehensive and strengthened framework, PITAD intends to pursue this mode of research in a more active manner by submitting research proposals and actively participating and winning in an open bidding to broaden its research areas and supplement its financial resources.

Out-Sourced Research:

To encourage collaborative research as well as to supplement research capacity unavailable in-house, PITAD also out-sources research to other organisations and well- known researchers. It also manages and monitors research / studies / strategy papers contracted out by the MOC.

ON-GOING / PLANNED RESEARCH ACTIVITIES

Product and Market Level Studies

At the policy level, the policy makers and the MOC in Pakistan face a continuous challenge of lack of product and market diversification along with a declining share of Pakistan's exports in world trade. While policy documents are filled with generic reasons for this stagnancy and decline, it is felt by PITAD that unless serious research is not undertaken in identifying the individual products and markets contributing to this situation, focused policy prescriptions and interventions cannot be formulated.

PITAD is currently engaged in a number of benchmark studies at the Product level (1, 2, 4 and 8 digit level) to estimate, and document the trends in competitiveness for the following products and sectors. These studies are being conducted at the individual research level:-

a) Agro-Food Products (1 digit level)
b) Leather and Leather Products (4-digit level)
c) Gems and Jewellery (4-digit level)

Diagnostic studies of direction of trade, that analyse changing markets and changing products over time are useful for trade attaches abroad as well as the domestic exporters, manufacturers and export bodies. A collective study has been launched selecting the following products at the 4- digit level as per their share in overall trade. These are also highlighted in STPF 2009-12:

a) Agro-Food Products (4-digit level)
b) Leather and Leather Products (4-digit level)
c) Meat and Meat Products (3-digit level)
d) Clothing (4-digit level)
e) Petrol / Chemical Products and Cement (4-digit level)
f) Gem Stones and Jewellery (4-digit level)
g) Misc. Manufactures (Sports Goods, Surgical Instruments)

Trade Reforms have been carried out in the country since 1988 in various forms, political regimes and varying speed. Their impact on sectoral export competitiveness is still largely unknown. PITAD has initiated a study based on primary level firm and industry data to conduct:-

• Impact Assessment of Trade Reforms on Sectoral Export Competitiveness of Yarn, Fabric and Garment Sectors.

Market Access, FTAs, PTAs, Regional and Bi-lateral Trade Agreements

In recent years FTAs, PTAs, RTAs and Investment Treaties are an important vehicle of gaining market access. Pakistan has entered into a number of FTAs e.g. Sri Lanka and China, and regional agreement SAFTA. It is contemplating to enter into few others e.g. EU and USA for BIT.

There are two policy questions to these arrangements for market access:-

A) First, we need to evaluate the existing agreements from the perspective of trade costs / benefits to the signatories. This can identify ways to maximise the benefits and also how best to re-structure future agreements.

B) Secondly, we need to start identifying products for which we have comparative advantage to use them for defining our negotiating space in prospective agreements.

Thus studies are needed in both dimensions. Currently PITAD's Research Focus is engaged in both aspects of policy issues.

- The collective study began last year on evaluating Pak-Sri Lanka FTA and is almost at the completion stage.
- Recently, gaining experience from the Pak- Sri Lanka study, another in-house collective study on Pak-China FTA has been launched.

Moreover one more study in the area of Regional Competitiveness is underway in PITAD.

- Extending Transit Facility to India under APTA: Implications for Afghan-Pakistan Bilateral Trade (Individual Research Paper)
- Econometric Modeling of bilateral/multi-lateral determinants of trade flows can provide important insights into ways for increasing trade in goods and services. Realising this, a study on gravity modeling of trade flows between India and Pakistan is underway in PITAD, which will be extended to other countries and regions subsequently.

Trade in Services

This is another growing area for positioning Pakistan's export internationally, regionally and bi-laterally.

A Contractual Study awarded by ADB on "Liberalisation of Trade in Services in SAFTA: Prospects and Challenges for Pakistan" has been recently completed. It covered the Health, Education, Trade facilitation and Transport and Telecommunication sectors.

Proposal for financing of an extension of the above study to Finance, Banking, Insurance, Construction and Other Business Service Sectors has been recently submitted to ADB. Proposal of "Trade in Services in SAFTA: Prospects and Challenges for India, Sri Lanka and Nepal" have also been submitted for ADB's financing.

Intra-regional trade in services can only flourish if complementarities can be found among the trading partners. An in-house study, will estimate the extent of complementarities of services sector for four major SAFTA members' countries i.e. Bangladesh, India, Pakistan and Sri Lanka".

Evaluating the Impact of Non-Tariff Barriers on Pak-India Trade.

Trade and Fiscal Policy

Inspite of overall reduction in levels of tariffs across countries globally, under the WTO regime, individual countries continue to impose tariffs to stabilise BOP and achieve macro-economic stabilisation. Pakistan imposed regulatory duty on 373 luxury items in Aug 2008 to reduce import bill and supplement revenues. Whether this had the desired effect, needs to be empirically verified for future policy actions. Thus the following collective study is in the final stage:

"Impact of Regulatory Duty on Luxury Imports and Revenue Generation"

"A Note on Impact of Export Duty on Yarn and Textile Exports: Preliminary Empirical Investigation" submitted to relevant ministries in Nov 2009.

Trade and ICT

An individual research paper to assess "The Impact of IPR Regime and Implementation in Pakistan on FDI" is also planned by PITAD.

Trade and Macro-Economy

Currently, every aspect of Pakistan's economy is bearing the brunt of war on terror. Pakistan's exports are no exception. Travel advisories, supply-side bottlenecks, are affecting our export competitiveness. The need is to quantify the costs of war on terror to our exports and thereby present a strong case for removal of tariff and non-tariff barriers imposed by our trading partners.

• A study on "Assessing the Socio-Economic Cost of War on Terror on Pakistan's Economy and Textiles Exports" has been initiated in PITAD.