Australia uninterested in a free trade agreement with Pakistan
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ISLAMABAD: Australia has refused to offer preferential market access to Pakistan on the grounds that the country has a very limited basket of tradable goods and services.
The formal demand for initiation of negotiations on a free trade agreement (FTA) covering goods, services and investment between the two countries was made in a meeting with top Australian officials in Islamabad on Tuesday.
Data show that Pakistan has higher bilateral trade in services with Australia than in goods with services imports worth $662 million in 2016-17, while exports for the same at $137m.
The bilateral trade in goods, though less in volume, is again highly in favour of Australia as its exports to Pakistan stood at $304.6m in 2018-19 while imports were valued at $206.5m.
A source privy to the meeting told Dawn that the Australian delegation flatly refused to start negotiations on a possible FTA between the two countries. He said they were of the opinion that there doesn’t seem to be any potential for a trade agreement.
Currently, Australia has FTAs with New Zealand, Singapore, Thailand, USA, Chile, the Association of South East Asian Nations (Asean), Malaysia, Korea, Japan and China.
These pacts give an edge to Pakistan’s competitors — Vietnam, Malaysia, Philippines, Thailand and Indonesia — who are covered under ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA). The countries covered by this FTA accounts for 67pc of Australia’s total trade.
Moreover, Australia is also negotiating an FTA with India, Regional Comprehensive Economic Partnership Agreement, Pacific Alliance Free Trade Agreement includes Chile, Colombia, Mexico and Peru, Gulf Cooperation Council, Indonesia-Australia Comprehensive Economic Partnership Agreement, Australia-Hong Kong Free Trade Agreement and Peru-Australia Free Trade Agreement.
The source said that Pakistan also demanded concessions in tariffs on the pattern offered to Bangladesh but the same was linked with the amendment in the Australian legislation.
Pakistan has also demanded market access for export of fruits to Australia. Currently, kinno, guava, fish, prawns shrimps, meat, chicken are not importable from the country. “We have requested for market access of these products,” the source said, but their import is linked with highly stringent conditions.
Currently, the country can only export mangoes and surgical instruments after fulfilling the conditions. “We have demanded greater market access for mangoes and dates,” the source added.
Meanwhile, the Australian side demanded market access for grains and pulses. Pakistan’s imports of goods from Australia include dried leguminous vegetables, fertilisers, petroleum gas, ferrous waste and scrap, uncoated craft paper and paperboard, unwrought lead, while exports are home textiles, petroleum oils (crude), rice, miscellaneous manufactured articles, men’s garments, leather apparel etc.
Published in Dawn, October 9th, 2019
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Comments (98) Closed
Oct 09, 2019 08:35am
Need to try try again. As Pakistan’s economy and produce diversify and increase Australia would benefit from having a formal FTA agreement with Pakistan and unequal trading relations are rapidly changing in our globalize world.
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Oct 09, 2019 08:55am
Free Trade agreements only work in your favour when you have more goods and services to sell than you buy. Pakistan's FTA with China shows how little the Pakistani officials know about trade and economics in general.
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Oct 09, 2019 09:09am
Too bad for Pak... Australia's loss.
Gordon D. Walker
Canada
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Oct 09, 2019 09:19am
first deserve then desire.
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Oct 09, 2019 09:24am
Pakistan should request and not demand, when it need favors by other countries.
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Oct 09, 2019 09:28am
There you go..
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Oct 09, 2019 09:30am
Pakistan is better off doing business only with China.
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Oct 09, 2019 09:47am
One day.... Some day
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Oct 09, 2019 09:57am
Australia is going to miss out on some of the most delicious fruits in the world. Mangoes, kinno, guava, and dates grown in Pakistan are some of the very best in the world.
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Oct 09, 2019 10:00am
Make great products And sale in low prices than your competitors, everyone will buy it. Focus on services and technology, there is no boundaries for it.
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Oct 09, 2019 10:12am
Trade relation will work only with China.
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Oct 09, 2019 10:19am
@Maya, And you are?
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Oct 09, 2019 10:21am
@NBBH, agreed
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Oct 09, 2019 10:26am
Good example of poor leadership.
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Oct 09, 2019 10:29am
Australia Pakistan trade is small and Australia wouldn't have time to thrash out an FTA if it doesn't want to curry favor as may be the case with Bangladesh.
India on the other hand has an advantage of potentially a big export market of fossil fuels and import of capital both human and financial.
Anyway Pakistan needs to improve competitiveness of its products and services in terms of price, quality and innovation to get favorable response from tough markets like Australia.
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Oct 09, 2019 10:31am
Please study more polished PROPOSALS.
And Oz perhaps feels it does not need more from Pakistan.
That is sad, but try more diplomatically, instead of demanding!
Maybe the Aussies are looking at your economy.
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Oct 09, 2019 10:36am
Demands instead of request?
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Oct 09, 2019 10:42am
Export driven growth is hard. Every country in the world is trying to export their way out of current account deficits, and to provide employment to their masses. It takes years to nurture and build a market for a product. Pakistan is better off focusing on its neighborhood. A good first step is to decouple trade from politics.
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Oct 09, 2019 10:48am
@Ashraf P, The do this for living. I am sure they know
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Oct 09, 2019 10:49am
Australia is a small market. Never mind!
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Oct 09, 2019 10:49am
Make peace with India and sign a FTA with India instead. Your economy needs it! Otherwise the country will continue to slide into the dark ages.
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Oct 09, 2019 10:52am
@Omar, understand that Australia is a part of quad against China. Hence forget FTA with quad members in near future. If Bangladesh Peru and Mexico can do it why not Pakistan
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Oct 09, 2019 10:58am
If that is the case, Pakistan can keep exporting whatever it is exporting and for imports, it can look for another market. Once the imports start drying then Pakistan would be in a better way to negotiate.
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Oct 09, 2019 11:09am
Be a normal country like others. Then everything will fall into place.
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Oct 09, 2019 11:12am
What does this say?
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Oct 09, 2019 11:24am
Sad, Australia isn't interested in the well groomed, considered undesirable by other nations and most exportable product that Pakistan is so famous for..
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Oct 09, 2019 11:25am
Won’t blame Aussies for this.
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Oct 09, 2019 11:28am
Why you cant trade war with Ausies...?
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Oct 09, 2019 11:36am
If you choose the right people with brains, they can do the job.
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Oct 09, 2019 11:45am
Australians will soon know the worth of Pakistani articles. But the stuff we are importing from Australia is what we have ourselves.
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Oct 09, 2019 11:58am
The fact is the Australians have a better deal with Indonesia.
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Oct 09, 2019 12:03pm
As pti has come into power no one is interested in doing bisiness with us.
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Oct 09, 2019 12:36pm
Thats what happens when you rely on import driven growth and have a national workforce of disinterested over the counter salesmen
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Oct 09, 2019 12:37pm
@Gordon D. Walker, one way is start importing less : no need for fruit: paper ; scarp : and do not give access to pulses and wheat: play hardball : Australia lose 300 millions market: Pakistan can buy elsewhere cheaper since its has to pay cash : start cutting down on imports and start making homemade - only imports machinery and plant that create employment and exportable items
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Oct 09, 2019 12:52pm
No problem Aussies, IK should cut all imports from Australia and find an alternate market for goods imported from there.
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Oct 09, 2019 12:54pm
Actually Australia has prevented onslaught of rebranded chinese goods through Pakistan. It's simple like that. Otherwise Australia has no enmity with Pakistan.
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Oct 09, 2019 01:52pm
There is nothing to trade with Pakistan
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Oct 09, 2019 02:03pm
True the numbers are insignificant in global terms to go the distance of a FTA. Pakistan has a major economy in China with whom should sign FTA. It will be difficult to sign FTA with western countries given the world still sees the country as volatile
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Oct 09, 2019 02:05pm
First the cricketing ties should be restored. That will lead to Aussie tourists coming to Pakistan and gradually appreciation of what the country can offer. Soft power may work as there is no tangible economic value.
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Oct 09, 2019 02:14pm
Chin is like 100000000 australia. There is not much australia produces. Pak will become a regional economic powerhouse very soon
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Oct 09, 2019 02:14pm
Tell Australia we have variety of terrorists in our basket, what are you talking about..
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Oct 09, 2019 02:35pm
@Ashraf P, go away Indian.
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Oct 09, 2019 02:57pm
In short Aussies says no to substandard goods and products.
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Oct 09, 2019 03:01pm
PayPal refuses to offer services in Pakistan.
China refuse to help with bullet train.
Aussies refuses free trade agreement.
Tabdeeli !
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Oct 09, 2019 03:02pm
Nothing new for Pakistan, by now they are habitual to refusals and rejections.
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Oct 09, 2019 03:08pm
@Hashim, all substandard and low quality.
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Oct 09, 2019 03:13pm
Pakistan has nothing that interests Australia, nor does Australia have a line of credit to open for its exports to Pakistan.... get the idea
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Oct 09, 2019 03:14pm
Dont think Australia does business on credit ....
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Oct 09, 2019 03:30pm
Not a big deal, Australia isn’t a major market.
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Oct 09, 2019 03:38pm
It's an incentive to increase your exports. Do not base your opinion on the current trade situation.
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Oct 09, 2019 03:44pm
Wondering how Pakistan is export crude oil to Australia. Seems like the concessions received from Saudia are Remonetized by diverting the oil to Aussies.
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Oct 09, 2019 03:50pm
Decrease the Australian imports,there many countrities in the world that exports can be increased with,all it takes developing products ,and presentation ,and a very confident approach,which shows strength! No desi, pleasing style which is taking as weak!
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Oct 09, 2019 03:52pm
@Hashim, the organic nature of products is what Pakistan needs to export these goods,plus,they can also work with Pakistani groceries stores in the west with private exports deals,and organic farm markets! Think out of the box!
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Oct 09, 2019 04:00pm
Well simple solution is what Mr. Donald Trump has been implementing with other countries. Either request them to match the trade deficits or put tariffs on their goods which are being imported. This will resolve this issue. Very simple measures.
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Oct 09, 2019 05:41pm
@Ashraf P, Pakistan has produced so many ecobomists. They know the economic fundamentals of trade. Where are those Johnhopkins Columbia Quid e Azam University PHDs. Please go find them and use them. Such a waste of talent and knowledge
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Oct 09, 2019 06:13pm
@Hashim, India can certainly provide them.
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Oct 09, 2019 06:59pm
If Pakistan can buy dried leguminous vegetables, fertilizers, petroleum gas, ferrous waste and scrap, un-coated craft paper and paperboard cheaper, of same quality or better, from any other country, it should consider it.
Pakistan should use this leverage for her interests.
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Oct 09, 2019 07:20pm
It is not the way the Aussies should behave with a nuclear power.
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Oct 09, 2019 07:33pm
Government needs to hire Pakistanis living abroad in the west or East Asia who have experience in trade and economics. If the system has to be corrected then same step must be taken
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Oct 09, 2019 07:35pm
At least, I get the confirmation that Australia is not among 58 countries that supported Pakistan at UNGA.
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Oct 09, 2019 08:04pm
We should look for opportunities elsewhere... Australia is not the end of the world.
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Oct 09, 2019 08:26pm
Who wants sub standard goods. I don't blame Australia. Plus the world knows what Pakistan's best exports are.
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Oct 09, 2019 09:00pm
Pakistan has suffered in development for 40 years under Zardari and Sharif.
They have looted the country and left bankrupt.
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Oct 09, 2019 09:15pm
Nothing much to offer. Fruit, carpets etc is what Pak can offer. Aust is a net producer of fruit and wool. Now perhaps Pak can offer irs PRC origin nukes?
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Oct 09, 2019 09:45pm
It's the reputation of the country not the choices of available goods to trade. Unfortunately, this is what our country is known for now. Corruption and infighting. Sad indeed.
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Oct 09, 2019 10:22pm
Pakistan should deal with China only.
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Oct 09, 2019 10:32pm
@Hashim, Who told you that
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Oct 10, 2019 12:11am
Australia has refused to offer preferential market access to Pakistan on the grounds that the country has a very limited basket of tradable goods and services. Very sad reply and a slap on businessmen who do not diversify with time. Same old textile cannot be our main stay. We have to look other manufacturing and developing opportunities.
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Oct 10, 2019 12:13am
@AHK, I am not agree with both.
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Oct 10, 2019 12:14am
@Grape sour, Keep your suggestion with your own
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Oct 10, 2019 12:37am
@The General Mindset, Pakistan should try to capture a sizable part of the over 50 Islamic Nations. Pakistan does need any other country for its Diverse Exports.
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Oct 10, 2019 12:40am
Don't chase those who flatly refuse to engage in trade with you. Find other markets, there are many out there.
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Oct 10, 2019 01:30am
@Shan, a big IF
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Oct 10, 2019 01:44am
@Rajesh, I guess you know what dark age means, someone sitting in India living through Modi's regime.
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Oct 10, 2019 01:48am
@Gordon D. Walker, .........and you are the chief economist for Australia? If you were to use commonsense you would understand better.
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Oct 10, 2019 01:50am
@Hashim, Miss out? Not having an FTA doesn't mean can't import, just means import / export with standard duties, taxation etc.
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Oct 10, 2019 01:54am
Unless Pakistan has something valuable to offer either in terms of exports or a large domestic market and consumers with purchasing power, a country like Australia will not be interested. Countries that have done it have either done it for strategic reasons or if they feel sorry for the country. For the time being, they don't see much of a potential and don't want to waste their time. Kinnoos and mangoes are fine, but they are still considered agricultural commodities, and Australians will not have a lower quality of life if they miss out on Pakistani fruits. Pakistan has to build its capacity to produce value added goods and build its comparative advantage in such things
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Oct 10, 2019 01:56am
@Zee, wrong. There is no FTA in place at the moment yet the two countries exchange trade based on price, availability, terms etc. FTA just allows "extra special treatment".
Business will continue as it has in the past. Both countries will buy and sell what they want so long as the price is right.
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Oct 10, 2019 02:56am
Have a free trade agreement with Saudi friends, they have a bigger and wealthier population than Australia and a larger market for tropical fruits like Mangos.
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Oct 10, 2019 04:39am
I am a patriotic Pakistani but I dont blame Australia. Pakistan has to work a lot in home first
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Oct 10, 2019 05:42am
I think this is an image problem of Pakistan. Moreover, Pakistan has a very few soft items to export to Australia which may not interest Australia. Anyway, first, Pakistan has to develop its economy, realign it’s Foreign Policy position and then try again. Australia , on the other hand has many other countries for its soft imports.
Ashok De, Canada
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Oct 10, 2019 06:05am
@Haris, And you are?
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Oct 10, 2019 06:28am
70 years of independence, some years of high growth especially in the consumer area.
and nothing to show for it?
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Oct 10, 2019 07:09am
I think the following data is enough for their refusal:
"Data show that Pakistan has higher bilateral trade in services with Australia than in goods with services imports worth $662 million in 2016-17, while exports for the same at $137m."
Any country Pakistan does less than $5 Billion will not entertain this idea. Any company in western world that has annual revenue of less than $10 B is considered a small company. Therefore Millions don't count. Wake up Pakistan. This 21st century.
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Oct 10, 2019 08:01am
Pakistan should curb import from Australia. We have many other markets from where we can import on FTA basis. For the sake of boosting economy,It is high time to give respect to only those countries, who give respect in return.
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Oct 10, 2019 08:07am
@NBBH, Wonder what India deserves for occupying Kashmiris for the last 63 days. .
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Oct 10, 2019 09:15am
Trying to sell fruits and agro products to Australia is like taking coal to New Castle! Why not sports goods, , textile and small tools to Australia?
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Oct 10, 2019 10:36am
@jaredlee007, Make your product worthy, so the buyer will come.
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Oct 10, 2019 10:46am
No country can demand anything from another country.
Request is the right word.
No wonders the Aussies balked.
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Oct 10, 2019 11:26am
@Ashraf P, They are all striving to improve the economy. To start now they will have to bear the pains b'coz pakistan does not have equal product to match Sales with Purchases. Pakistan should move ahead as there is no alternative.
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Oct 10, 2019 12:00pm
@Uzair Harman, Forget about Differences beyween Ind and Pak, If trade between them was open. Pak would be most Beneficial in terms of Costing.
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Oct 10, 2019 12:01pm
@cricket fan, Valued Thinking
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Oct 10, 2019 02:53pm
Its surprising to know that there is actually trade between pakistan and australia
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Oct 10, 2019 02:57pm
Pakistan is acting big in contrast to what it is.
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Oct 10, 2019 05:42pm
@Gordon D. Walker, Australia has nothing too loose.
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Oct 10, 2019 05:42pm
@Hashim, Who says that?
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Oct 10, 2019 06:03pm
Pakistan on the grounds that the country has a very limited basket of tradable goods and services.""
Reality check. Accept facts as to where Pakistan stands in goods and services.
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Oct 10, 2019 09:02pm
World competition is based on quality, price, speed and reliability. One should select how they fare on these criteria. It may be soothing and patriotic thing to to think Australia is the loser. Think again. Australia does not want to deal and they are not in economic abyss.
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