ISLAMABAD - Pakistan will start paying up to Rs4 billion annually on loans obtained under China-Pakistan Economic Corridor (CPEC) in next few years, Senate standing committee on commerce and textiles was told on Tuesday.

The committee, which met under the chair of Senator Shibli Faraz, sought details of loans which will be payable in future. The officials of Ministry of Commerce told the members of meeting that new trade policy is in the making, in which service policy and investment and tariff issues are also included.

Officials said that the free trade agreement (FTA) with China is being considered again. The Ministry of Commerce officials said that the FTA with China will be revised.

Under the FTA signed with China in 2006, Pakistan was given market access at zero duty on industrial alcohol, textiles, marble, leather articles, sports goods, fruits and vegetables, iron and steel products and engineering goods. As per agreement, China reduced its tariff by 50 percent on fish, dairy products, frozen orange juice, plastic, rubber and leather products, knitwear and woven garments. But, Pakistani products were not feasible for the Chinese market due to high cost of doing business, whereas Pakistani markets became saturated with Chinese products.

The industry complained that the local market has collapsed due to cheap Chinese products and high cost of doing business. After the strong resentment from local industry and imbalance in trade, the government did not implement the second phase and tried to convince Chinese authorities to revise the existing terms of the agreement, on the less-than-equal reciprocity principle, to overcome growing trade imbalance between two countries.

The officials told the meeting that the free trade agreement with Indonesia would also be revised due to growing trade imbalance. The meeting was informed that the volume of export of dates has increased to 150 million from $140 million and a processing plant will be installed in Kahirpur. The Senate body suggested installing a plant at KP as well. The custom wing in Balochistan has been established which has stopped smuggling worth Rs9.5 billion. The officials said that 272 officers have been recruited for the wing, who are controlling smuggling of goods at borders in close coordination with Ministry of Interior.