PAKISTAN’S Free Trade Agreement (FTA) with Malaysia, signed back in 2007, was considered a landmark trading arrangement. Being the gateway to the Association of Southeast Asian Nations (Asean) region, Malaysia appeared a good destination for Pakistani products. It also complemented more than 90 per cent of Pakistan’s requirements of crude and refined palm oil, and coconuts. Besides, a significant quantity of rubber, paper and wood was also imported. Both the countries offered margin of preferences with respect to customs and tariffs.

However, the bilateral trade between the two countries shows a gross tilt in favour of Malaysian imports. In the 2023-24 fiscal, Pakistan exported goods worth $460 million compared to imports from Malaysia worth $1.04 billion; a trade deficit of $580 million. Presently, Pakistan’s top imports from Malaysia include palm oil, machinery and mineral fuels. Pakistan’s exports mainly consist of agricultural products and foodstuff, like rice, vegetables, fruits and meat. This can be tremendously increased.

It is noteworthy that Pakistan’s major export items, such as rice, have no duty-free access in Malaysia, and face a competitive disadvantage despite a strong demand. The commodities are subject to higher tariffs compared to Asean countries. Additionally, Pakistani rice is priced $10-15 higher per metric tonne than Indian rice, further weakening its market position.

During his visit to Pakistan, Malaysian Prime Minister Anwar Ibrahim had assured the government that tariffs on Pakistani rice would be revised to match those applied to other competing countries. However, no such adjustment has been made thus far. Besides, there are enormous non-tariff barriers (NTBs) affecting our exports, especially meat and seafood.

The government should engage with the relevant Malaysian authorities to negotiate lower tariffs on Pakistani exports. This would promote fair competition and stimulate export growth, leading to overall improvement in our export portfolio.

Shahid Ali Abbasi
Karachi

Published in Dawn, May 15th, 2025