LAHORE

In an attempt to take maximum advantage of the trade deal, the commerce ministry will start the next round of talks with the Chinese government from March 31, 2015 to implement the second phase of Pak-China Free Trade Agreement in Beijing.

Industry representatives have raised concerns over insufficient utilization of concessions of tariff incentives available in the FTA by Pakistan side while Chinese industry is availing benefit fully through duty free access of their goods to Pakistan.

The country is presently facing a loss of over Rs22 billion annually due to trade imbalance, suggesting the Chinese authorities a reduction in tariff of not more than 50 percent. Pakistan and China, in earlier rounds of talks, had agreed to allow banks to open branches in each other's country but no progress has been seen on this decision so far. Initially, National Bank of Pakistan (NBP) and Habib Bank Limited (HBL) are expected to open their branches in China.

They said that the FTA was signed with China without taking the real stakeholders on board and therefore it was damaging the local industry. As the country’s economic managers are engaged in fresh rounds of talks with a number of countries for free trade agreements, they cautioned the government to take business community into confidence before finalizing trade deals with other countries.

They said the business community is the real stakeholder which should be consulted in preparing policies to enhance exports so that fast widening trade deficit could be diminished, which is prerequisite for economic growth.

Industrialists are of the view that dumping is the main concern of local industries, particularly of steel products, polyester staple fiber and many other products, he said.

At present, the balance of trade is in favour of China as against exports of $2.5 billion; Pakistan imported products of $7.5 billion from China.

They added that Pakistan had been continuously suffering a loss of Rs.22 billion on account of tax exemptions granted to imports from China.

Free trade access to China could not be fully utilized in favor of Pakistan, because Beijing did not reduce duties on products where Pakistani sectors enjoyed a competitive advantage.

Moreover, the margin of preference over other countries that Pakistan should have enjoyed effectively turned to be fruitless when China inked similar free trade accords with other countries, particularly with the Association of Southeast Asian Nations (Asean).

They pointed out that the leather industry is still paying around 9% import duty on its export goods to China owing to non-implementation of zero-duty under FTA regime.

They said that in second phase of FTA 9% duty was to be reduced to zero, which is not being implemented so far because Pakistani government is not supporting its industry to pursue the case for the last two years, he complained.

They agreed that international image building is the need of the hour with complete overhauling of TDAP, besides formation of new trade specific export promotion agencies having independent budgets and policies.