FTA to strengthen Pak-China bilateral trade ties
Islamabad : Dr Wang Zhihua, minister counselor, Economic and Commercial Section, Chinese Embassy in Pakistan, has said that the finalisation of second phase of Free Trade Agreement (FTA) between two countries on the sideline of second Belt and Road Forum will help resolve these issues and strengthen further bilateral trade ties.
Dr Zhihua was speaking at a seminar on ‘Pakistan China Free Trade Agreement: where we are and where we are going?’ organised here by the Sustainable Development Policy Institute (SDPI).
Dr Zhihua said that though trade volume between Pakistan and China increased over the years, trading imbalance remained the biggest challenge and concerned by the Pakistani government and the business community. The main reason behind the trade imbalance between the two countries was of structural in nature as China has possessed strong manufacturing base to export goods as compared to import.
Dr Zhihua observed that as per Phase-2 of FTA, China agreed to eliminate duties on more than 300 products, especially in the agriculture sector where Pakistan has the potential to expand its export basket to China. He said China also encourage more business to business interaction activities in China to help Pakistani business community to learn more about Chinese demand and needs. He said that we hoped that the incumbent government would adopt new industrial policy at the earliest to help improve business environment and ease of doing business. He said this would also help Chinese investors to bring more investments, which will also help build manufacturing capacity of the country.
Project Director and Focal Person for CPEC, Hassan Daud Butt said in the previous FTAs between China and Pakistan, there were no safeguard measures for industries, no synergy between relevant institutions, balance of payment vision was not incorporated, and no data exchange policy was agreed to counter under-invoicing issues. He said the revised FTA with China incorporated all these factors to make the commercial relationships beneficial for both countries.
Dr Hina Aslam, head of China Study Center, SDPI, said that even though Pakistan and China signed two FTAs already — one in 2006 on trade in goods and the other in trade in services in 2009 — yet their impact was less than salutary on Pakistan’s economy. Under the revised FTA, China has agreed to provide duty free access and unilateral concession to 313 Pakistani product lines (an increase of 257 tariff lines) over the next fifteen years. Moreover, under the new FTA, Pakistan would commission approximately 65% of its market with Chinese exports, whereas China would open up 90% of its market for Pakistani exports, she said adding his would also help in remedying the colossal $10 billion trade deficit last year.
Mustafa Hyder Sayed, Executive Director, The Pakistan-China Institute, Islamabad, stressed the need for changing mindset when it comes to trade with China.