By Sajid Irfan

The recent agreement between Pakistan and Brazil to enhance bilateral trade will help the former to increase its foreign exchange reserves, WealthPK reports.

Both countries have inked an agreement on bilateral trade of certain commodities. Trade with Brazil would help to expand the business sector in Pakistan.

Dr Javed Iqbal, a trade economist at Quaid-i-Azam University Islamabad, told WeakthPK that Pakistan needed to boost its trade more than ever during those testing times. He said that the enhancement in trade would increase Pakistan’s foreign exchange reserves, which were decreasing constantly owing to the current financial constraints faced by the country.

He hoped that enhanced bilateral trade between Pakistan and Brazil would prove instrumental in increasing the foreign exchange reserves of the former. He said that trade between Pakistan and Brazil would create investment and business opportunities.

The expert said that both countries would benefit from the trade agreement. Pakistan is one of the top 40 export markets for Brazil and one of the top six markets for Brazilian soybeans, which are known worldwide for their quality and high sanitary standards.

“Pakistan’s trade commodities with Brazil also includes textiles and meat. A great deal of potential exists between the two countries that should be harnessed. In Brazil, a number of Pakistani products are in high demand. Pakistani exporters are encouraged to send more commodities to Brazil,” he said.

Dr Javed Iqbal termed cooperation between Brazil and Pakistan in the field of defence as one of the most promising areas, supported by the exchange of high-level military delegations and training courses.

During the past several years, Brazil has been able to enjoy a trade surplus with Pakistan. In 2015, Brazil’s top imports from Pakistan included articles of apparel and clothing, cotton and other items.

“Brazil’s exports to Pakistan have seen a sharp increase. It can be attributed to the increase in exports of cotton, animal or vegetable fats and oils, oil seeds and oleaginous fruits,” said the expert.

He said that Brazilian businessmen could also enter into an arrangement with their Pakistani counterparts for local manufacturing of their goods and supplying the same to the Asian markets. He said that local manufacturing of Brazilian goods would reduce shipping costs significantly. He added that Brazil could also provide high-quality products to Pakistan at reasonable prices.

“The government should facilitate businessmen to find export opportunities in Brazil and work for getting more concessions in the form of lesser duties and taxes,” said Dr Javed Iqbal.

He said that the focus should remain on the diversification of the market, products and value addition to maximise the dollar-based earnings for the country. “Pakistan has enormous potential for hydropower generation while it is one of the largest sugar producers in the world. Brazil can cooperate with Pakistan for generating energy from renewable sources,” he told WealthPK.

Credit : Independent News Pakistan-WealthPk