ISLAMABAD: In a move signaling a recalibration of trade and industrial policy, Special Assistant to the Prime Minister (SAPM) Haroon Akhtar announced that Pakistan intends to revisit its existing Free Trade Agreements (FTAs) to better align with national economic goals and reduce trade imbalances.
Speaking at a press conference, Akhtar acknowledged that several FTAs—such as the China-Pakistan Free Trade Agreement (CPFTA) and Pakistan-Sri Lanka FTA (PSFTA)—were signed without adequate preparedness, leaving Pakistan vulnerable to import surges and export stagnation.
“The moment our GDP crosses 2 or 3%, pressure mounts on our reserves because imports outpace exports. We have become import-dependent,” said Akhtar.
He emphasized the need for a strategic reassessment of trade deals to improve domestic competitiveness and ensure reciprocal benefits.
The approach echoes global trends, as he pointed to the US imposition of reciprocal tariffs as a strategy to revive local manufacturing.
Bankruptcy Law in the Pipeline
The SAPM also revealed that the government is finalizing a bankruptcy law aimed at protecting struggling businesses amid deteriorating macroeconomic conditions.
Highlighting that 90% of defaults recorded by the Credit Information Bureau (CIB) stem from external economic shocks—like high interest rates, energy costs, and taxation—Akhtar stated:
“If we can’t protect businesses from systemic shocks, we risk factory closures. A modern bankruptcy framework is vital.”
The proposed law would provide companies an avenue to restructure and recover, similar to bankruptcy protections in other jurisdictions.
Reserves and Investment Focus
To stabilize foreign exchange reserves, Akhtar emphasized the need to stimulate domestic investment, suggesting that local investor confidence is key to attracting foreign direct investment (FDI).
“Domestic investors are the best signal to foreign investors. We must create an environment that inspires both.”
