The Federal Board of Revenue has approached the Ministry of Commerce to figure out the advantages and disadvantages of Free Trade Agreements (FTAs) signed with China, Malaysia and Sri Lanka, ascertaining whether Pakistani exporters have fully gained access to the international markets.
Sources told Business Recorder on Friday that the cost benefit analysis would determine the actual beneficiaries of these FTAs. It has to be determined whether the importers of foreign goods gained more market access or Pakistani exporters have also gained the same benefits in their respective market.
As Pakistan has sacrificed its revenue due to signing of FTAs, the analysis would confirm whether Pakistani exporters also gained equal access to the international markets. The cost benefit analysis would also check that the exports to these countries have been actually increased or not as a result of FTAs.
Sources said that the exact revenue impact of FTAs and Preferential Trade Agreements (PTAs) has also not been worked out since implementation of these agreements. Pakistan has been continuously signing such agreements with different countries, but so far no cost benefit analysis has been carried out. The profits and losses of such agreements to Pakistan would also be figured out due to FTAs/PTAs.
The FBR has asked the Commerce Ministry to conduct a study on scientific grounds whether objectives of signing the FTAs/PTAs have been met or not. The study would help in ascertaining the benefits and gains of such agreements with different countries.
According to sources, Pakistan has signed such FTAs with China, Malaysia and Sri Lanka, the cost benefit would be analysed with the help of qualified experts to see whether Pakistan has also gained any benefit from these agreements.
Sources said that Pakistan had inked FTA with Sri Lanka three years ago; China, one and a half year and agreement was signed with Malaysia around 2 years ago. However, the actual benefit of such agreements to Pakistan is still not known.
Sources said that the study would also check whether the FTAs and PTAs have adversely contributed in imbalance of trade. If the FTAs/PTAs has resulted in increase in overall quantum of imports, then whether our exporters have achieved the same objectives in the international markets of their partner countries.
Sources said that every free trade agreement has a certain cost, but its actual revenue implications have not been verified since signing of such conventions. It is very important to analyse whether the partner country has given full market access to our exporters or not. Sources said that the FBR would request the Commerce Ministry to provide consultants, if necessary, for carrying out such kinds of analysis with the help of tax officials.