LAHORE: Chairman of the German Pakistan Chamber of Commerce and Industry (GPCCI), Syed Nadeem Ali Kazmi, in letters to Minister of Finance, Miftah Ismail, and Minister of Commerce, Syed Naveed Qamar, urged the government to cancel the ban on vehicles imported from Germany.
Kazmi wrote to ministers stating that “The German Chamber of Commerce and Industry in Pakistan urges the immediate removal of the import ban implemented in the automotive sector, as this current crisis caused by the import ban, such measures oblige our organizations German member automobiles to leave the Pakistani market with tar reaching negative repercussions leading to the decommissioning of more than 30,000 cars (Audi, BMW, Mercedes-Benz) and a complete end to the transfer of German innovative technologies in terms of knowledge and skills needed to maintain these vehicles.
“You are kindly requested to take steps to lift the ban immediately and since then we realize that the administrative steps will take a few days to implement your directives. we must insist on a firm date when the ban on German car imports will be lifted so that we can inform our member accordingly” Kazmi said, calling the import ban an “existential crisis” for the three German automakers
Kazmi also highlighted the possible ramifications the ban could have on Pakistan’s GSP+ status saying “Germany has in the past been a strong supporter of Pakistan in the EU for its application for GSP+ status. GPCCI is concerned that the counter-productive step of the German car import ban could damage Germany’s motivation which is essential to promote the new GSP+ application in the European Parliament”
It is pertinent to note that, as Kazmi points out, Pakistan must reapply for the GSP+ scheme as the current one will expire in 2023. The Friedrich Naumann Foundation for Pakistan Freedom and the Institute for Policy Research Market Economy (PRIME) have already jointly published a paper pointing out that in the absence of GSP+, Pakistan would be subject to 12% tariffs.
Kazmi also cited the historical and economic ties between Pakistan and Germany to support his argument stating that “Germany and Pakistan have enjoyed close and diverse relations since I95I. Last year marked the 70th anniversary of the establishment of diplomatic relations” and that “More than 40 German companies have established their presence in the Pakistani market. Some of the well-known German companies based in Pakistan include udi, BMW, Mercedes-Benz, Siemens, BASF’ Bayer’ DHL, Metro Cash and Carry, KSB Pumps and SAP’ to name a few.
The import ban was implemented on May 19, 2022. The government cited the ban as a necessary measure that saved the country from failure. Prohibition has since its inception been tapered. However, imported automobiles have not yet been given a break.
Kazmi questioned the effectiveness of the import ban, citing the fact that German car imports amounted to only 100 million euros, which is unlikely to reduce the balance of trade deficit. payments from Pakistan. It should be noted that Pakistan’s total imports of Completely Built Vehicles (CBU) amounted to only $600 million in FY 2021/22, or 0.75% of Pakistan’s total imports for the period.