KARACHI, Nov 27: A fast-growing economy with increasing appetite for imports has renewed European interest in the in Pakistani market. The worldwide imports of machinery and equipments soared to $4.2 billion in last fiscal.

In the outgoing fiscal year, imports from Europe jumped from a little over $2.4 billion to just under $3 billion. In absolute terms, the figures may not be very impressive but the annual growth in the range of 20-25 per cent has been impressive.

With strong fundamentals, the present economic boom is expected to be sustained at least for the medium-term, which will further open up opportunities for trade and investment. The visits of Swedish delegation led by Ambassador Jan Palmstertna and the head of South Asia in German foreign office Bernd Borchardt indicate some of the trade potential will be realized.

The Germans have renewed their interest in concluding an investment promotion and protection treaty with Pakistan, a draft of which they had submitted to the government of Pakistan a year ago. The issue was raised by the visiting German official with authorities in Islamabad. A German trade delegation is expected to visit Pakistan in February next year. Presently, their focus is on trade though German companies operating in Pakistan may strengthen their businesses through short-term investment. German exports to Pakistan increased from $562 million in FY 2003 to $611 million in fiscal 2004 while imports went up simultaneously from $580 million to $606 million.

Similarly, the Swedish trade mission came to familiarize itself with the Pakistani market and the economic scenario. At a dinner hosted by Hony Consul General of Sweden M. Moonis, a Swedish official told Dawn that business ideas have emerged in discussion with government officials and contacts have been established in the private sector.

Some progress has been made on 2-3 projects under discussion and on sale of some defence equipments. But it will take time for the final decisions to be known. To follow up the ideas, meetings between Pakistani and Swedish businessmen may be organised either in Sweden or in Pakistan or in both countries depending on the nature of the response.

Over the FY2004, Swedish exports to Pakistan were up from $40 million to $67 million and its imports increased from $58 million to $71 million. Swedish officials say that imports from Pakistan are much higher than reflected in the bilateral trade because of an integrated EU market providing their requirements.

In the year 2005, the recovery of industrial economies including those of Europe is expected to slow down against a robust economic growth forecast for developing Asia. It means developing countries like Pakistan could offer a potential market for European states. A possible snag in trade could be a strong euro that would make imports costlier against a sliding dollar that would mean cheaper American goods.

The Europeans have to offer goods at competitive prices or re-locate their manufacturing facilities in countries like Pakistan to produce cheaper goods. Of course, much larger trade could precede investment. The two sides can best co-operate by providing access to each other's market. Hopefully, Pakistan would have more access to European markets for its textiles after the quota-free WTO arrangement comes into force next January. It needs to be recognized by the developed world that countries like Pakistan must earn from exports to buy imported goods.