Islamic Republic of Pakistan located in the South Asia, which has a 1,046 kilometer coastline along the Arabian Sea and the Gulf of Oman in the south. Pakistan’s population was recorded as 188.9 million in 2011. Its GDP is 211 billion USD, and its growth rate is 2.4% in 2011. The total trade volume of the country is 64.7 billion USD. The services sector makes the main contribution to the GDP and constitutes 53.1% of the GDP. The agricultural sector of Pakistan has 21.6% share from total GDP, while industrial sector has a share of 25.3%.

Pakistan’s economy is mainly led by the exports of textile yarn and fabrics which constitute 86% of Pakistan’s total exports.

Pakistan is a member of ECO, OIC and Group of D-8.

Pakistan has Free Trade Agreements (FTA) with China, Sri Lanka, Malaysia and SAFTA (South Asian Free Trade Area) and Preferential Trade Agreements (PTA) with Iran and Mauritius, which include substantial reduction on the customs duties. Moreover, as a “Developing Country”, Pakistan protects its internal market with high customs duties from other countries that does not have a trade arrangement with Pakistan.

On the other hand, Pakistan doesn’t have an FTA with the European Union. Regarding its obligations deriving from the Customs Union, Turkey plans to start FTA negotiations with Pakistan simultaneously with the EU. However, as an indicator of the political willingness of Turkey and Pakistan to strengthen the bilateral economic and commercial relations before the beginning of the negotiations of the FTA, Turkey-Pakistan Preferential Trade Agreement negotiations were initialized and being conducted.

Furthermore, in order to complete the legal framework of bilateral commercial and economic relations, Turkey and Pakistan have signed a number of agreements, including  Trade Agreement (1965), Economic and Technical Cooperation Agreement (1976), Prevention of Double Taxation Agreement (1988) and Reciprocal Promotion and Protection of Investments Agreement (1997).

Within the framework of the Economic and Technical Cooperation Agreement entered in force in 1976, Turkey-Pakistan Joint Economic Committee Mechanism was established. Since that date, regular meetings are being held with the participation of public institutions from both Turkey and Pakistan alternately in Ankara and Islamabad to evaluate all aspects of the bilateral economic and commercial relations.

In order to strengthen the relations between the private sectors of the two countries, and to encourage establishing new business contacts, Turkey-Pakistan Business Council was founded. In this regard, after a five-year period, the last meeting of the Turkey-Pakistan Business Council was held in October 2011.

With the aim of establishing a mutual confidence and cooperation environment among Turkey, Pakistan and Afghanistan, Turkey has initiated the “Turkey- Afghanistan-Pakistan Trilateral Summit” meetings in 2007.  In this regard, the 6th Meeting of the Summit was held on December 2011 in Istanbul.

Exports

Pakistan was Turkey’s 78th largest export partner in 2011.

Turkey’s exports to Pakistan were 213 million USD in 2011 with a decrease of 14% (248 million USD) from 2010. Since 2005, in which Turkey’s “Asia-Pacific Commercial and Economic Relations Development Strategy” was initiated, Turkey’s exports to Pakistan have raised by 14% (187 million USD).

The top export categories (2-digit SITC) for 2011 were: textile yarn and fabrics (7.6%); miscellaneous manufactured articles (6.5%); dairy products and birds' eggs (6%); cereals and cereal preparations (5.1%), and machinery for particular industries (4.5%).

Imports

Pakistan was Turkey’s 45th largest import partner in 2011.

Turkey’s imports from Pakistan realized as 873 million USD in 2011, with an increase of 16% (750 million USD) compared to 2010. Besides, our imports from Pakistan have increased 177% since 2005.

The top 5 imports categories (2-digit SITC) for 2011 were: textile yarn, fabrics, made-up articles (59%); plastics in primary forms (13%); articles of apparel, clothing accessories (13%); organic chemicals (5%) and leather, dressed fur skins (2.6%).

Trade Balance

Even though the trade volume is high between Turkey and Pakistan, our trade relations have an unbalanced structure against Turkey. The trade volume between Turkey and Pakistan exceeded 1 billion USD in 2011, and the trade deficit against Turkey is 659 million USD, which increased by 31% (502 million USD) compared to 2010.

Contracting and Consultancy Services

Pakistan is a significant market for Turkish contractors. Turkish firms have entered into Pakistan market in 1992, and held 37 projects with a total value of 2.4 billion USD up until now.

Investment

By the end of 2011, Turkish FDI stock in Pakistan is 30 million USD. Besides, Turkish foreign direct investment (FDI) stock in Pakistan was 52 million USD between 2005 and 2011.

Reported Turkish direct investment in Pakistan is led by the energy, finance, infrastructure and contracting sectors.

FDI of Pakistan in Turkey (stock) is 88 million USD in by the end of 2011.