Enforcement Of Tariffs On Imports To Protect Local Manufacturers
I once planted a seedling in my garden. I watered it daily, provided it with the required nutrients, protected it from windstorms and watched it grow into a healthy plant. Then, to increase the greenness of my garden, I added a fully-grown eucalyptus shrub to it. In the days that followed, I saw the first one turning into a leafless collection of stems. What could be the possible reasons behind this observation? What made a nascent plant die off so soon? Maybe this was caused by the introduction of the water – and the nutrient-leeching eucalyptus shrub. Maybe the growth of the exotic plant changed the former’s fate of becoming a strong tree.
On that note, one is of the view that everyone wants to see a prosperous and economically stable Pakistan as well, with minimum unemployment, but we must determine the best way to achieve this goal. In the opinion of the notion’s opponents, the local industry can flourish without the enforcement of tariffs on imports by employing other methods. Had this been possible, Germany and France in 1955 and USA in 2002 would not have imposed tariff on steel. Had this been possible, USA would not have imposed tariffs on cotton, automobiles, electronics, and agricultural and pharmaceutical products. Had this been possible, India would not have imposed heavy tariffs on automobiles which resulted in it now having exports of 14.5 billion dollars in the respective field, with the establishment of Maruti Suzuki and Hero Honda. No, dear readers! This is not possible because we do not see many individuals riding Sohrab or Metro motorbikes here in Pakistan.
The opponents’ arguments are usually based on the supposition that we are in favor of the enforcement of tariffs on all sorts of imports. This assumption is nullified by the fact that Australia and China’s tariff percentages were reduced from 14.3 and 20 as in 1990 to 5.17 and 7.10 as they are today owing to the advancement in industry. The point to be noted here is that the tariff percentages have been reduced, not completely ceased. Look at USA, China, Germany and India; every economy first determines the areas in which it has the potential of thriving. Having an agro-based economy, Pakistan should have taken effective measures to uplift the exports of agricultural products, but instead it removed the tariffs, which resulted in the loss of 1 billion dollars during 2013 and 2015. Similarly our textile exports suffered a loss of 2.3 billion dollars in the absence of tariffs during 2011 and 2014. However, they are now worth approximately 7.5 billion dollars which was made possible owing to the availability of good quality cotton and imposition of tariffs on its import. Local manufacturers need government’s shelter in order to fully exploit a country’s human as well as natural resources. This is the most applicable way of eradicating unemployment rather than employing labor to off-load sacks of onions and potatoes from trucks at Wahgah border.
The opponents may object to my choice of examples. They may object to me quoting the superpowers of this capitalist world. But we should not forget that every superpower of today was a small economy of yesterday. We can see Greece, Spain and Italy whining about the economic depression they are going through and the rewards being earned by massive economies like Germany and France in the name of European Union’s free trade. Brexit is yet another vindication. These examples further justify the indispensable need of enforcement of tariffs in way of facilitating the local manufacturing units.
I realize that the energy crisis, poor policy making, corruption and security issues prevalent in our country have adversely affected our produce and exports, but instead of imposing an additional pressure in the form of international competition, we must first allow the local manufacturers to utilize the limited resources they have in order to produce low-priced, good quality products. Therefore we must enforce tariffs on imports to encourage the local industry. We must enforce tariffs on imports to eradicate unemployment. We must enforce tariffs on imports to generate revenue. And we must enforce tariffs on imports to promote justice. After all, as John Rawls has said, “Justice is best off for the worst.”
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