Experts call for regionalism, in-house reforms amid capacity building to absorb US tariff regime shocks-10241-News

ISLAMABAD (07 November 2025): The international, regional and national experts unanimously advocated for in-house policy reforms and capacity upping for developing countries to absorb US-tariff regime’s exogenous shocks and embrace trade diversification with regional commerce giants. The suggestion was rendered at a roundtable, titled: “Tariff Turbulence: Policy Options for Global Trade Governance” organized on the third day of 28th Sustainable Development Conference by Sustainable Development Policy Institute here on Friday. Muhammad Ashfaq, Joint Secretary for Ministry of Commerce, said Pakistan needs to review its entire paradigm of economic development as the geopolitical scenario considers geoeconomics for devising policy decisions to counter external tariff shocks.  He added that by 2030 the developing countries are going to lead 45% of the world production, which is a nightmare for the West, that's why they are changing rules and policies. “WTO is itself based on the principles of advocating exports, integrating economy, interdependence, globalization, however, it is also now replaced by hyper globalization as a new concept. The situation is not going to remain the same post-US tariffs,” the official said. He suggested that diversion of trade is a way out with regionalism as part of the solution. Dr Sajid Amin Javed, Deputy Executive Director, SDPI said the US tariff regime has an inverse impact for the country with trade deficit bearing no tariff, while by the time it's surplus. it will incur tariffs. The unpredictability and uncertainty prevailing in the global market could cause great confusion in global trade that needs to be worked out. Dr Paras Kharel, Executive Director, SAWTEE, Nepal said the crux of the matter is geopolitics as China entered WTO that resulted in Trump reciprocal tariff formula implying tariff on surplus exports.  “Internal reforms and capacity building is critical for developing countries tackling the US tariff. There is a lack of universal definition of issues like human rights, governance and public development but it can be used as a weapon in tariff war with implications on developing nations,” he said. Dr Kharel suggested that South Asia has miniscule inter-regional trade that should be connected as ASEAN region to bear external shocks. Dr Safdar Sohail, Executive Director, Social Protection Resource Centre, said Pakistan’s negotiations with the US have never been difficult due to its geostrategic nature whereas the latter was forcing everybody to start traditional evaluation of exports. However, Pakistan’s old tools of trade policy analysis have gone obsolete and require a review and revamp. “Global trade governance is now linked to investments in services, infrastructure and technology that is critical for countries like Pakistan,” he said. Prof. Talha Yalta from TOBB University, Türkiye said that the new US tariff regime’s power play is not sustainable as their industry is not sustainable. He noted that the World Trade Organization has weakened, which was the only global institution capable of arbitration, but the world would not revert to old trade order.  Prof. Yalta underlined that the developing countries’ biggest need is to diminish their structural weaknesses as these countries need to understand their imports and exports cycle of their economy. “If globalization is not working than regionalism can be approached as a way forward. Pakistan and Turkiye share associations at different multilateral forums that can be approached for regionalism like Shanghai Cooperation Organization (SCO), and D-8,” he said. Dr Mona Shrestha, Chief Executive Officer of EMERGE, Geneva said the gender dimension is important component of the tariff discourse that needs to include people with disabilities, people from rural areas and marginalized communities whereas export of services needs to be taken into consideration. Dr Manzoor Ahmed, International Trade and Customs Facilitation Expert, suggested that the countries like Pakistan had to join the Asia’s biggest trading block to counter extraordinary impacts of the US-tariff regime. He said hyper globalization is the moment of opportunity as there are countries like Turkiye and China that promote venues for regionalism and serves as an appropriate source of trade diversification. This year, he said, Pakistan has started five-year tariff programme that will have above average trade with the Asian countries. “Regionalism is thriving and Pakistan should be part of major regional trade regimes and groups whereas domestic reform is a prerequisite for Pakistan to improve its trade profile,” he said.