Tensions between Pakistan and Japan are escalating over alleged ‘forced’ car exports, with the potential for the dispute to be taken to the World Trade Organization (WTO). This development follows Pakistan’s directive to its three major Japanese car assemblers—Indus Motor Company (Toyota), Honda Atlas Cars Pvt. Ltd, and Pak Suzuki Motors Limited—to increase their export activities, a demand seen by Japan as a violation of WTO regulations. The controversy centers around the Auto Industry Development and Export Policy (AIDEP) 2021-26, which enforces a gradual increase in export obligations for automobile manufacturers in Pakistan, setting targets that reach 10% of their total imports by 2025-26. The car manufacturers argue that Pakistani exports face significant hurdles, including additional tariffs, the absence of Free Trade Agreements, and limited avenues for exporting right-hand drive vehicles. One critical challenge cited by the manufacturers is the scarcity of local raw materials, particularly in metal and rubber processing, which could potentially enhance the competitiveness of Pakistani cars in the global market. Japan has formally expressed its concerns through multiple channels, including Pakistan’s WTO and Tokyo missions and its Commerce and Industries ministries, arguing that the forced export policy infringes on WTO agreements. Pakistan maintains that its actions are in compliance with WTO rules. The issue is set for bilateral discussions between the two governments, with the possibility of escalation to the WTO if a mutual agreement is not reached. The WTO dispute resolution process may be invoked if Japan remains dissatisfied with Pakistan’s justifications, potentially leading to formal proceedings.

A high-level meeting of Pakistan, Russia, and Central Asian Republics (CARs) is likely to be held on April 23-24, 2024 to discuss the financing of the Uzbekistan-Afghanistan-Pakistan (UAP) rail project. This was revealed at a meeting of the Afghanistan CARs/Azerbaijan Inter-Ministerial Coordination Cell (ACICC) presided over by the Foreign Affairs secretary. On the UAP rail project, the representative of the Ministry of Railways informed that the roadshow was held in Tashkent on February 6, 2024, attended by Uzbekistan, Pakistan, Afghanistan, and Qatar to discuss matters of financing. Pakistan informed that USD 1 million has already been spent on pre-feasibility study and a detailed report has been prepared by E&Y Consultants. It would be better to start the construction work instead of initiating another feasibility study.

Saudi Crown Prince Mohammed Bin Salman (MBS) especially invited Prime Minister Shehbaz Sharif and his delegation to an Iftar at Al-Safa Palace here on Sundary 7th April. Shehbaz landed in Saudi Arabia on Saturday on a three-day visit from April 6 to 8. The premier performed Umrah soon after arriving in Makkah. “Crown Prince Mohammed bin Salman hosts an Iftar at Al-Safa Palace in Makkah, attended by the Prime Minister of Pakistan and the Crown Prince of Bahrain, where they all broke their fast together,” reported Saudi Gazette. During the premier’s visit, multiple development projects would be finalised, whereas bilateral cooperation in several sectors, including agriculture, continues between the two countries, said the sources. They said Saudi Arabia was expected to invest $1 billion in the Reko Diq project. Pakistan and KSA have longstanding fraternal relations rooted in religious and cultural affinity.

The Pakistan Cotton Ginners Association (PCGA) reported that the country produced 8.397 million bales in 2023-24, a 71 per cent increase over the preceding year. However, the output fell short by a record 3.873m bales or 32pc against the target fixed for the year. The PCGA said cotton production in Punjab was 4.282m bales while in Sindh it was 4.115m bales. Of the total output, according to the report, textile mills bought 8.043m bales from ginning factories, while exporters bought 2.93m bales and 60,500 bales are still available with the ginning factories. Cotton Ginners Forum Chairman Ihsanul Haq says that cotton production in Sindh is surprisingly 114,000 bales more than the target. At the same time, production in Punjab has decreased extraordinarily, mainly due to adverse weather conditions and whitefly cotton. “It has been an unusual attack on the crop.” He says that due to heavy taxes imposed on the ginning and textile industry, some factories and textile mills across the country did “off-the-record” trade in cotton during the year. He claims that the volume of this “off-the-record” trade amounts to at least two million bales, which is why the total domestic production of cotton is considered to be around 10.5 million bales.

Pakistan is putting on the block a stake ranging from 51% to 100% of loss-making national carrier Pakistan International Airlines PIA, the privatisation panel said on April 2nd, as part of reforms urged by the IMF. The disposal of the flag carrier is a step past elected governments have steered away from as likely to be highly unpopular, but progress on the privatisation will help cash-strapped Pakistan pursue further funding talks with the IMF. In a newspaper advertisement, the panel set a deadline of May 3 to receive statements of interest in PIA, which has piled up arrears of hundreds of billions of rupees, and it appointed EY Consulting as the financial adviser for the deal. “The restructured PIA is being offered to potential investors in its ‘debt-lite’ new structure for a 51%-plus stake,” the Privatisation Commission said in a website presentation. The panel aimed to sign a share price deal by June 24, after completing all steps in the transaction, it added. “The restructured PIA provides an opportunity to invest in a full-service airline.” The IMF wants reforms to State-Owned Enterprises (SOEs) that more clearly define ownership and government roles. Shares of the airline PIA dropped 7.5% in intra-day trade to hit the lower limit, after soaring more than 403% in the last six months.