Obama Trade Deals TPP and TISA Are Good For Pakistan
US President Barak Obama is pushing legislation to gain fast track authority to negotiate Trans Pacific Partnership (TPP) and Trade in Services Agreement (TISA) as part of his pivot to Asia. TISA faces stiff opposition from Obama's fellow Democrats and organized labor who fear significant loss of American service sector jobs to other TISA member nations. Pakistan is one of the countries that will likely benefit from these trade deals. President Obama is expected to get the authority he seeks because TPP and TISA are both supported by the pro-business Republicans who now control both houses of the US Congress.
Trans Pacific Partnership is crucial for America's Pivot to Asia which is aimed at checking China's rise and maintaining America's continued relevance in Asia. It is part of America's answer to Chinese-led Asian Infrastructure Investment Bank and Silk Road fund to promote Chinese trade with Asia and Europe. China-Pakistan Economic Corridor is the first major piece of this Chinese plan. Pakistan's inclusion in TPP and TISA confirms America's continued interest in maintaining close ties with its old Cold War ally in South Asia.
Trade in Services Agreement is being negotiated among United States, European Union, Australia, Canada, Chile, Hong Kong, Iceland, Israel, Japan, South Korea, Liechtenstein, New Zealand, Norway, Switzerland, Taiwan, Uruguay, Colombia, Costa Rica, Mexico, Panama, Peru, Turkey, Pakistan and Paraguay. These countries make up about two-thirds of the global GDP.
Trade in service is being more and more important with rapid growth in services sector of the world economy. Services now account for nearly two-thirds (64%) of the world GDP with the rest coming from manufacturing (30%) and agriculture (6%). Services account for even higher percentages of GDP in US (80%) and EU (73%).
Service sector is also the largest and fastest growing sector of Pakistan's economy. Services account for nearly 60% of Pakistan's GDP while manufacturing and agriculture each contribute about 20%. It therefore makes sense for Pakistan to join multilateral trade in service deals like TISA.
A key TISA provision likely to benefit Pakistanis is ease of visa restrictions for “Movement of Natural Persons” among member nations which include the United States, the European Union, Japan, South Korea, Australia and Canada. This section discusses commitments by the parties not to place undue burdens on visas and singles out face-to-face interviews as an example of “overly burdensome procedures.” Even before this agreement is in place, there has been a growing ravel from Pakistan to US with 78,000 Pakistanis traveling to the United States on various non-immigrant visas in 2013, the most recent year for which data is available.
Other provisions of TISA would ease outsourcing of a variety of services from America and Europe to Pakistan. These include information technology services, back office services, medical, engineering, legal and accounting services. These outsourced services will help create job opportunities for hundreds of thousands of college grads pouring into the job market every year.
The US-China competition appears to be quite beneficial to Pakistan as both great powers continue to court the country through trade and investment deals. I hope Pakistani leaders will play their cards well to get the maximum help they can to build the country's human resources, infrastructure and economy.
Related Links:
Haq's Musings
Pakistan Third Most Popular Destination For Online Outsourcing
How Will Robots Impact Late Industrializers?
Pakistan Ranks in the Middle For Infrastructure and Logistics in 2014
Pak-China Industrial Corridor
India-Pakistan Economic Comparison 2014
Pakistan's Infrastructure
State Bank Says Pakistan's Official GDP Under-estimated
Pakistan's Growing Middle Class
Pakistan's GDP Grossly Under-estimated; Shares Highly Undervalued
Fast Moving Consumer Goods Sector in Pakistan
3G-4G Roll-out in Pakistan
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| Member Nations of Trade in Services Agreement (TISA) |
Trans Pacific Partnership is crucial for America's Pivot to Asia which is aimed at checking China's rise and maintaining America's continued relevance in Asia. It is part of America's answer to Chinese-led Asian Infrastructure Investment Bank and Silk Road fund to promote Chinese trade with Asia and Europe. China-Pakistan Economic Corridor is the first major piece of this Chinese plan. Pakistan's inclusion in TPP and TISA confirms America's continued interest in maintaining close ties with its old Cold War ally in South Asia.
Trade in Services Agreement is being negotiated among United States, European Union, Australia, Canada, Chile, Hong Kong, Iceland, Israel, Japan, South Korea, Liechtenstein, New Zealand, Norway, Switzerland, Taiwan, Uruguay, Colombia, Costa Rica, Mexico, Panama, Peru, Turkey, Pakistan and Paraguay. These countries make up about two-thirds of the global GDP.
Trade in service is being more and more important with rapid growth in services sector of the world economy. Services now account for nearly two-thirds (64%) of the world GDP with the rest coming from manufacturing (30%) and agriculture (6%). Services account for even higher percentages of GDP in US (80%) and EU (73%).
Service sector is also the largest and fastest growing sector of Pakistan's economy. Services account for nearly 60% of Pakistan's GDP while manufacturing and agriculture each contribute about 20%. It therefore makes sense for Pakistan to join multilateral trade in service deals like TISA.
A key TISA provision likely to benefit Pakistanis is ease of visa restrictions for “Movement of Natural Persons” among member nations which include the United States, the European Union, Japan, South Korea, Australia and Canada. This section discusses commitments by the parties not to place undue burdens on visas and singles out face-to-face interviews as an example of “overly burdensome procedures.” Even before this agreement is in place, there has been a growing ravel from Pakistan to US with 78,000 Pakistanis traveling to the United States on various non-immigrant visas in 2013, the most recent year for which data is available.
Other provisions of TISA would ease outsourcing of a variety of services from America and Europe to Pakistan. These include information technology services, back office services, medical, engineering, legal and accounting services. These outsourced services will help create job opportunities for hundreds of thousands of college grads pouring into the job market every year.
The US-China competition appears to be quite beneficial to Pakistan as both great powers continue to court the country through trade and investment deals. I hope Pakistani leaders will play their cards well to get the maximum help they can to build the country's human resources, infrastructure and economy.
Related Links:
Haq's Musings
Pakistan Third Most Popular Destination For Online Outsourcing
How Will Robots Impact Late Industrializers?
Pakistan Ranks in the Middle For Infrastructure and Logistics in 2014
Pak-China Industrial Corridor
India-Pakistan Economic Comparison 2014
Pakistan's Infrastructure
State Bank Says Pakistan's Official GDP Under-estimated
Pakistan's Growing Middle Class
Pakistan's GDP Grossly Under-estimated; Shares Highly Undervalued
Fast Moving Consumer Goods Sector in Pakistan
3G-4G Roll-out in Pakistan
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http://www.voanews.com/content/pakistan-army-chief-visits-russia-to-forge-new-ties/2825903.html …
This recent thaw between the cold war rivals is a “natural outflow of Russia’s concern about what is going to happen to Afghanistan after the withdrawal of the U.S.,” explained Nandan Unnikrishnan, who has served as Press Trust of India’s bureau chief in Moscow for several years.
If Afghanistan becomes unstable, the spread of militancy and Islamist radicalism is expected to spread to the weak states around it.
“The weak states are not China and Iran,” explains Center for Strategic and International Studies analyst Michael Kofman, who focuses on Russia and has worked on Pakistan.
Most of the Central Asian states around Afghanistan have porous borders, weak governments, and varying degrees of autocracies which makes them prone to instability or ethnic conflict. Militants from some of these states are already present in both Afghanistan and Pakistan.
“Frankly Tajikistan, Turkemenistan, Kyrgyzstan, these are all great targets, and Uzbekistan too,” Kofman said.
This is Russia’s backyard. Russia has a military presence in several of these countries and a large military base in Tajikistan.
Furthermore, there is a sizeable Muslim population inside Russia. So far the country has not faced issues of radicalization and militancy but it is not immune from them, particularly if the neighboring states fall victim to them.
Another reason for Russian overtures toward Pakistan may be to gain leverage with the Afghan Taliban via Islamabad in case the elected Afghan government falls.
“In the minds of Russian security services there is little doubt that Pakistani intelligence services and Pakistani establishment have very strong links with some of the Afghan Taliban,” according to Indian journalist Nandan Unnikrishnan.
Russia’s attempt at redefining its relationship with Pakistan comes at the risk of upsetting India, its traditional ally and largest defense sector customer.
However, Russia has justified this by pointing out that India has also looked to its rival, the United States, for its purchases. In the last few years, the U.S. has surpassed Russia to become India’s largest arms supplier.
Russia may also be looking to Pakistan as an untapped market. Pakistan’s direct defense trade with Russia has been limited, $22 million a few years ago compared to billions of dollars of trade with India.
Pakistan has usually received Russian equipment through China, which is not known for making aircraft engines and often uses Russian engines in its planes.
One of the benefits for Pakistan in trading with Russia will be “to cut out China as the middle man and save a lot of money,” according to Kofman of CSIS, who pointed out that Pakistan’s JF-17 Thunder aircraft, jointly developed with China, and recently in the news for receiving its first foreign order, uses Russian engines.
He also explained that the extent of this defense cooperation will depend on how much money Pakistan can spend.
“Russia, at the end of the day, is not in a position like the United States to subsidize defense deals,’ he said.
However, in a post Ukraine world of increased hostilities between Russia and the West, it is in Russia's interest to show that it is not isolated and has partners willing to do business with it.
Meanwhile, the United States has long encouraged countries in the region to take a greater interest in the stability of Afghanistan and has strongly supported China’s efforts in facilitating peace talks between the Afghan Taliban and the government of Afghanistan.
Many analysts think that at this point the United States is happy to have any actor that can contribute towards stability in Afghanistan, including rivals Russia and China.
Financial services company India Nivesh has warned that when the Trans Pacific Partnership (TPP) comes into effect, India would be negatively impacted to a major extent; though India would not be the only country at disadvantage. China, Pakistan, Bangladesh, Sri Lanka and other non-members of TPP would also be adversely affected.
The US is in advanced stages of closing the Trans Pacific Partnership (TPP) agreement – one of the largest free trade agreements signed involving 12 countries.
In a report,India Nivesh said the entire supply chain would undergo a major change as Vietnam would enjoy duty free access to one of the largest textile and apparel market i.e. the US. This would render other non-member countries at disadvantage reducing their competitiveness in the global market.
The report said Indian companies can try to work around the TPP by establishing capacities in Vietnam and take benefit from TPP instead. China has already begun investing in Vietnam to benefit from TPP.
This is a huge opportunity for Indian companies as they have various incentives from Indian and Vietnamese governments. To take advantage of yarn forward rule, spinning and weaving capacity would be more beneficial, as garment capacities are in abundance in Vietnam.
With the nearing expiry of Technological Fund Scheme by March 2017, setting up capacities in Vietnam offers an alternative for cost effective expansion. India would be positive on companies establishing their manufacturing capacities in Vietnam especially in spinning and weaving, as they exhibit their foresightedness to take advantage of benefits of TPP.
Currently, companies are evaluating the investment scenario in Vietnam. As per media reports, Aditya Birla group is considering an investment in Vietnam in the weaving and dying segment of the industry. Also, Welspun group is considering an investment in Vietnam, the report said. (SH)
http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=173369
-Sir Colin McColl, former MI6 Chief
For years public figures have condemned cyber espionage committed against the United States by intruders launching their attacks out of China. These same officials then turn around and justify America’s far-reaching surveillance apparatus in terms of preventing terrorist attacks. Yet classified documents published by WikiLeaks reveal just how empty these talking points are. Specifically, top-secret intercepts prove that economic spying by the United States is pervasive, that not even allies are safe, and that it’s wielded to benefit powerful corporate interests.
At a recent campaign event in New Hampshire Hillary Clinton accused China of “trying to hack into everything that doesn’t move in America.” Clinton’s hyperbole is redolent of similar claims from the American Deep State. For example, who could forget the statement made by former NSA director Keith Alexander that Chinese cyber espionage represents the greatest transfer of wealth in history? Alexander has obviously never heard of quantitative easing (QE) or the self-perpetuating “global war on terror” which has likewise eaten through trillions of dollars. Losses due to cyber espionage are a rounding error compared to the tidal wave of money channeled through QE and the war on terror.
When discussing the NSA’s surveillance programs Keith Alexander boldly asserted that they played a vital role with regard to preventing dozens of terrorist attacks, an argument that fell apart rapidly under scrutiny. Likewise, in the days preceding the passage of the USA Freedom Act of 2015 President Obama advised that bulk phone metadata collection was essential “to keep the American people safe and secure.” Never mind that decision makers have failed to provide any evidence that bulk collection of telephone records has prevented terrorist attacks.
If American political leaders insist on naming and shaming other countries with regard to cyber espionage perhaps it would help if they didn’t sponsor so much of it themselves. And make no mistake, thanks to WikiLeaks the entire world knows that U.S. spies are up to their eyeballs in economic espionage. Against NATO partners like France and Germany, no less. And also against developing countries like Brazil and news outlets like Der Spiegel.
These disclosures confirm what Ed Snowden said in an open letter to Brazil: terrorism is primarily a mechanism to bolster public acquiescence for runaway data collection. The actual focus of intelligence programs center around “economic spying, social control, and diplomatic manipulation.” Who benefits from this sort of activity? The same large multinational corporate interests that have spent billions of dollars to achieve state capture.
Why is the threat posed by China inflated so heavily? The following excerpt from an intelligence briefing might offer some insight. In a conversation with a colleague during the summer of 2011 the EU’s chief negotiator for the Trans-Pacific Partnership, Hiddo Houben, described the treaty as an attempt by the United State to antagonize China:
“Houben insisted that the Trans-Pacific Partnership (TPP), which is a U.S. initiative, appears to be designed to force future negotiations with China. Washington, he pointed out, is negotiating with every nation that borders China, asking for commitments that exceed those countries’ administrative capacities, so as to ‘confront’ Beijing. If, however, the TPP agreement takes 10 years to negotiate, the world–and China–will have changed so much that that country likely will have become disinterested in the process, according to Houben. When that happens, the U.S. will have no alternative but to return to the WTO.”
http://www.counterpunch.org/2015/07/20/the-terrorism-pretext-mass-surveillance-is-about-money-and-power/
The lawsuit revealed that ClearCorrect was sending scans of its customers' teeth to an affiliate in Pakistan, which created digital models on computers before sending the data back to 3D printers in Texas to be transformed into molds for braces. Align then went to the ITC, which ordered ClearCorrect to stop importing the tooth-model data from Pakistan.
A fight over a patented way to straighten teeth may wind up giving Hollywood studios, book publishers, software developers and other copyright holders a new ally in their fight against piracy. At issue is whether the U.S. International Trade Commission — a federal agency that resolves complaints about imports that violate U.S. copyrights, patents and trademarks — has jurisdiction over data that comes into the country through the Internet.
The dispute pits Align Technology of San Jose, which makes Invisalign braces, against ClearCorrect of Round Rock, Texas, which makes a competing brand of transparent teeth-straighteners. Align initially sued ClearCorrect in federal court for allegedly violating its patented method, which involves creating multiple digital models of a patient's teeth to produce the succession of plastic braces. The lawsuit revealed that ClearCorrect was sending scans of its customers' teeth to an affiliate in Pakistan, which created digital models on computers before sending the data back to 3D printers in Texas to be transformed into molds for braces. Align then went to the ITC, which ordered ClearCorrect to stop importing the tooth-model data from Pakistan.
The decision, if it stands, would be a watershed — the first time the ITC stopped imports that arrived electronically. And the major studios and record labels are eager to explore how the agency might help stop foreign websites from delivering bootlegged movies and songs to U.S. Internet users. But a number of technology industry companies have joined ClearCorrect in challenging the decision, arguing that the law gives the ITC purview only over tangible goods. Besides, they say, the ITC can't exactly order U.S. customs agents to open every digital packet entering the country and inspect it for infringing items. Stopping information from flowing through the Internet isn't as simple as turning away a truckload of infringing orthodontics at the border.
Still, entire industries are replacing their physical products with digital ones. Confining the ITC to tangible goods would leave it unable to do the job Congress created it to do, which is to protect U.S. companies from unfair competition by foreign rivals.
Granting the ITC jurisdiction over data imports should not, however, lead to the agency imposing broad restraints on Internet service providers in the hope of shutting down foreign piracy hotbeds. The agency's reach shouldn't extend beyond those directly involved in or profiting from the infringements, whether it be digital or physical. And to make sure the ITC stays within that boundary, Congress should specify just how far the agency can go to remedy infringements online.
http://www.latimes.com/opinion/editorials/la-ed-braces-itc-20150812-story.html
The services sector contributing by 59.2% to Pakistan's gross domestic product (GDP) exported services worth $5.4 billion in fiscal year 2015-16 (FY16), with a deficit of $ 2.9 billion as compared to last fiscal.
The deficit of $ 2.9 billion was 3.8 percent lower than the deficit recorded last year and the State Bank of Pakistan (SBP) attributed this small improvement mainly to a reduction in the freight deficit, which is the largest component in the country's services trade profile, as a result of the big decline in oil prices.
Services exports' share in the economy has gradually increased from 50 percent in FY00 to 59 percent in FY16 .However, past data suggests that services exports have stagnated around this level since FY10.
'The commodity producing sector, which has been growing at a slower pace as compared to services, may not be able to generate sufficient exportable surpluses to meet the country's growing foreign reserves needs', SBP added.
Inflows under government services - primarily Coalition Support Fund (CSF) and other military services - account for more than one-third of the country's total services exports. This is substantially higher than the share of government services of only 2 to 3 percent in the world trade in services. Given the non-economic and one off nature of government services, the high share does not bode well for long-term stability of export receipts. Incidentally, flows under CSF dropped drastically in FY16, the central Bank elaborated.
'The current level of Pakistan's services exports does not reflect the country's true potential. Concerted efforts are needed to facilitate services exports by strengthening the regulatory framework; well-thought liberalisation of trade in services; investment in human resource development (especially in education and training for select services); improving access to finance for service-oriented industries; encouraging the private sector to form services coalitions and enterprise networks; promoting specialization in financial services; and improving data availability', SBP suggested.
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Non-CSF government services exports have recorded a sizable growth over the last two years; if this trend continues, it may cushion any further fall in FX receipts under CSF. The export of commercial services, which is obtained by adjusting overall export of services for government services, has remained almost flat at $ 3.4 billion since FY11.
These were only 1.2 percent of GDP in FY16, which is far below the global average level of 6.0 percent of world GDP. These exports are concentrated in transport, Information Communication Technology (ICT), travel, and business segments. These four (out of 11 major categories) have a combined share of more than 90 percent in overall export of commercial services.
ICT services exports, which continued to increase up to FY13, have stagnated since then.
This stagnation is largely stemming from telecommunication services, as revenues from foreign network operators (for calls that originate from outside Pakistan) are declining. This drop has come about as internet-based messaging and voice services, like Skype, Viber and Whatsapp, have gained tremendous traction locally. However, the negative impact was largely offset by the growing export of computer services. Exports of both software consultation services and of computer software, have maintained an upward trajectory since FY06.