Enforcing the tariff wall via trade-distorting import measures: Comparison across measures

Continuing the discussion from the previous data story on import tariffs and custom duties as reported by Ahmed Jamal Pirzada, EAG Member, it is imperative to gauge the number of interventions involving import restricting measures adopted by the Pakistani policymakers to not only curtail imports into the country but also provide incentives to local industries to produce within Pakistan. These measures were implemented by policymakers between 2015 and July 2024. Although, such import measures have typically failed to bear fruit in terms of increasing industrial productivity in Pakistan, it is essential to determine the products that have reported such measures and the frequency of the different measures adopted by the government[1]. The data for this exercise is extracted from Global Trade Alert[2].

First, the seafood industry stands as an anomaly as it has reported a much higher proportional share of interventions (HS 03) compared to other industries in the last decade. This is followed by the interventions on fruit products (HS 08). Interestingly, the government backtracked on reduce regulatory duties to zero on these items in the five-year tariff reform plan released on July 1^st 2025. This clearly suggests the desire of the government to not only protect the agricultural sector but also raise tariff revenues from the imports of the aforementioned products.

Second, the machinery and the transportation products (HS 84, HS85 and HS87) report the highest number of interventions following the agricultural products. The various forms of import duties on machinery and transportation products have been the most contentious issue as there is a longstanding demand by the consumers to relax the restrictions and improve the level of competitiveness. However, the producers and their associated lobby groups have exerted significant pressure to ensure that the imports remain restricted, which is often blamed for the lack of competitiveness and growth of locally produced varieties in the domestic market.

Third, the textile sector reports the highest government interventions following the aforementioned sectors. The textile inputs, particularly of cotton (HS 52), have reported an increase in regulatory duties, while other textile inputs have reported (HS 54 and HS 55) tariffs on synthetic inputs, adjustment on import tariffs on chemicals and yarn while facing a barrage of other measures that have increased the cost of production.

In essence, there is a significantly large barrier that has been built to curtail imports over the last decade as different measures were introduced to curtail imports with the purpose of reducing the external pressures on the balance of payment as well as provide incentives to local producers to substitute foreign products and inputs. This has adversely impacted the economy as it hampered local production and productivity. Now that the government had indicated its desire to reverse course and increase trade liberalization, EAG strongly recommends that the policymakers do away with the complex set of import measures, adopt trade-enhancing measures that provide the necessary green signal to policymakers to continue on the path to tariff reforms despite of the reservations.

[1] The interventions include all import-restricting measures that have been implemented in the last decade. Each intervention is tallied at the HS six-digit product level. All products listed in a particular policy document (SROs etc) are counted. Although, several measures have been removed subsequently as government policies continue to evolve, this exercise is not specific to measures currently in force.

[2] Simon J. Evenett and Johannes Fritz (2020). The Global Trade Alert database handbook.   Manuscript, 26 October 2022.