Auto parts makers oppose IMF push for liberalisation | The Express Tribune
Key Takeaways
- Paapam opposes IMF's push for trade liberalization, especially tariff reductions and used vehicle imports.
- The association fears these measures will lead to deindustrialization, job losses, and reduced investor confidence in the auto sector.
- Importing used vehicles could derail Pakistan's localization efforts for New Energy Vehicles (NEVs).
- Paapam highlighted existing tax evasion mechanisms related to vehicle imports by overseas Pakistanis.
- The association called for a phased reform approach with safeguards, skill rebuilding, and incentives for local production.
The Pakistan Association of Automotive Parts & Accessories Manufacturers (Paapam) has expressed deep concern regarding the International Monetary Fund's (IMF) recent proposals advocating for trade liberalization, particularly the reduction of tariff protections and the allowance of commercial imports of used vehicles. While acknowledging goals like economic efficiency, Paapam cautioned that these actions could severely damage the domestic auto sector, leading to job losses and eroding investor confidence, potentially causing deindustrialization. The association specifically warned that importing used vehicles, which often fail modern standards, could derail Pakistan's nascent new energy vehicle (NEV) localization efforts. Furthermore, Paapam flagged existing vulnerabilities where imported vehicles bypass tax oversight through informal channels, urging policymakers to explain the rationale for selectively targeting the auto sector. They stressed the need for a phased reform approach, backed by safeguards and incentives for domestic production, to ensure reforms reflect Pakistan's industrial realities.
