Россия и ВТО: присоединение и его последствия / Текущая аналитика / Abstract of the article: Master’s Thesis Topic: “Pakistan and Russia Bilateral Trade opportunities”, by Qazi Muhammad Uzair

Abstract of the article: Master’s Thesis Topic: “Pakistan and Russia Bilateral Trade opportunities”, by Qazi Muhammad Uzair

Bilateral trade agreements have emerged to be the most important trade agreements in the new economic world where countries trade for mutual benefits to achieve economic growth and stability. Pakistan and Russia had very poor political and economic relations due to the fact that Pakistan supported the US side during the cold war of Afghanistan (extremely bad relations during the 1980’s) but the tables turned after the start of 21st Century especially after the incident of 9/11 in America and the US policy towards Pakistan changed. The window of Pakistani and Russian political and economic relations was all set to re-open and it started when the Pakistani president Mr. Parvez Musharraf visited Russia in 2003 and the Economic and Political ties were made stronger. In 2007, Russian Prime Minister Mr. Mikhail Fradkov visited Pakistan and the ties between the countries became stronger. But the major breakthrough was attained during the annual quadrilateral summit in 2010 which included Pakistan, Afghanistan, Tajikistan and Russia where bilateral meetings between the Pakistani and Russian President were done and many agreements were signed. Since, both countries’ major oolitical persons have visited each other and the economic and political ties have only got better. One more major factor of bringing Pakistan and Russia closer is the Indian tilt towards US in the last decade, where India used to have closer ties with Russia but now as they have moved closer to the US, the ties between Pakistan and Russia have got a clear path as Pakistan and India are well known political rivals. The relations of Pakistan and Russia face a regional challenge as India, Afghanistan and US have close ties for the recent decade and both India and Afghanistan have long border with Pakistan but both countries have made significant number of agreements in the last decade and there are many more areas of interest left untouched so the potential of bilateral benefits is potentially huge.

Pakistan needs Russia to invest to revive the economy and Russia sees Pakistan as a good market for export of its products, mainly the military equipment, gas, energy sector and investment projects. In 2011, Russian Prime Minister Vladimir Putin publicly endorsed Pakistan’s bid to join the Shanghai Cooperation Organization (SCO). In the same year, Russia helped Pakistan to complete project related to the Pakistan Steel Mills which brought the countries even closer. In 2013, the countries agreed to work against the drug trafficking in Asia. In 2014 another milestone of bilateral relations was achieved when Russia lifted embargo over the arms supplies to Pakistan. The Russian government agreed on sale of MI 35 Helicopters on which the Indian defense Ministry tried to intervene but were told by Russian authorities that it is to help Pakistan fight against the war on terror. In 2014, Pakistan and Russia signed a most sought-after energy deal of $1.7 billion for laying a liquefied natural gas (LNG) pipeline from Karachi to Lahore, project accepted by Russian government. In the year 2015, more major developments were made; another agreement was agreed for the sale of Mi-35 helicopters and Russia accepted a project of $ 2 billion to construct a gas pipeline in the North-South. The Russian government is also keen to become a part of CPEC (China Pakistan Economic Corridor) which has already crossed $ 50 billion. The Russian government sees this as a good opportunity to invest in Pakistan and become a major part of CPEC.

The start of crisis for Russia with Ukraine meant strategic changes especially when US and European policies started to intersect that of Russian, at the same time, America’s decision to withdraw major amount of forces from Afghanistan made the path easier for Pakistan and Russia to come closer and collaborate in economic, military, regional politico-strategic and security areas. Some major common interest aspects of both countries are as follows;

  • Russia recognizes the Pakistan’s strategic location with Afghanistan, where the instability in Afghanistan can bring disrupt in the Central Asian republics as well as the North of Pakistan can control drug trafficking to Afghanistan which takes its path through Central Asian republics to Russia.
  • Pakistan has seen many political changes in relationship with neighboring countries as well as with the USA and needs regional powers like China and Russia to have strong and good political & economic ties for a prolonged sustainability.
  • The number of NATO troops left in Afghanistan are reported to be around 10,000. The only transport route for supplies for these soldiers are through Pakistan, there is no other alternative route for the supplies of these soldiers and so Pakistan and Russia can use this situation for good and bring more stability in the region of Afghanistan and thus the Central Asian republics.
  • Now that Pakistan has become a member of SCO (through support of Russia), the bilateral relations between all the member states are generally going to get stronger and thus the relations between Pakistan and Russia as well. Pakistan looks to extend its bilateral trade with Russia in sectors of biotechnology, aviation and space, climate change adaption, disaster management, drug trafficking and so on.
  • The Islamic Movement of Uzbekistan based in Afghanistan is the biggest political organization in the Central Asia and it is a concern for Russia. With help of Pakistan, the situation can be controlled as Pakistan has been fighting the war against terrorism for more than a decade now and the expertise of Pakistan against war on terror are well known globally.
  • Pakistan lack resources in the energy sector while on the other hand Russia is the biggest producer of oil and gas and Russia has shown keen interest in investing in Pakistan in the energy sector as a potential market. Both countries have huge potential and benefits in the energy sector dealings.
  • The Gawadar port of Pakistan can open new horizons for Russia to trade through the Indian Ocean. In this regard not only Russia can benefit new trading opportunities but also Pakistan will step forward economically through Russian investment.
  • The strategic partnership of Russia and China plays a key role in the stability of the region and it opens the door for Russia and Pakistan to move closer as well. Pakistan and China agreed on a massive project of CPEC (China Pakistan Economic Corridor) in which Russia can become a major part and expand this project even more. The initial worth of the project is $50 billion dollars and it can be much more with inclusion of Russia.
  • If Afghanistan regional stability gets better then Russia and Pakistan can enhance the trade through this route. Also the relations between Pakistan and India if get more stable, Russia can use Pakistani route to trade with India, this route will be much shorter and less costly for Russia.
  • There is a big potential for Pakistan to increase its Agricultural and textile goods exports to Russia. Russia has specific sanctions from European countries and in response Russia has limited the import of agricultural products, thus, it is a big opportunity for Pakistan to step up and increase its agricultural products exports to Russia.
  • Russia is a leading state in field of sports. Pakistan produces the finest and cheapest sports goods. Pakistan can increase its sports goods export to Russia which will be beneficial for both countries.
  • During the last decade the relations between Pakistan and USA have gone badly. Pakistan’s major military equipment market was that of USA but now that Pakistan and USA have problems in this regard, it opens up the opportunity for Pakistan to make Russia its major military and defense market. Russia lifted the embargo on Pakistan on sale of defense equipment and already there has been many deals completed in this sector and there is more potential for Pakistan to buy from Russia.

Free trade agreement between Russia and Pakistan has been discussed many times from both countries but nothing concrete has been achieved yet. Both countries should focus to get this free trade agreement done which will bolster the trade immensely between the two countries. It will also encourage private businessmen and entrepreneurs to start trading between both countries.

Sources:

Muhammad Taimur Fahad Khan. Renaissance of Pakistan-Russia Relations.

Institute of Strategic Studies, www.issi.org.pk. December 27, 2016.

Rana MF. Comparative Relation with Russia: Pakistan and India an Approach to Peace and Position. Journal of Political Sciences & Public Affairs Published date: May 10, 2017

Rashid Siddiqi. Prospects for Russia-Pakistan Rapprochement. Iqra University, Islamabad.

Россия и ВТО: присоединение и его последствия

Кафедра мировой экономики экономического факультета Санкт-Петербургского государственного университета, которая является единственным в России и на постсоветском пространстве институциональным партнером Всемирной торговой организации и реализует проект "Кафедра ВТО", при поддержке Министерства иностранных дел Великобритании представляет Вашему вниманию информационный портал "Россия и ВТО: оптимизация последствий присоединения". Он призван обеспечить надлежащую подготовку правительства, таможенной службы и бизнес-сообщества в Северо-Западном и других регионах России к операционным изменениям и изменениям в регулировании, которых требует присоединение России к ВТО.