ISLAMABAD: Commercial Section Pakistan Embassy Beijing admitted that neither the opportunities arising from China Pakistan Free Trade Agreement (CPFTA-II) were fully utilised nor were Pakistani exporters able to penetrate large Chinese market in sectors where Pakistan enjoy a reasonable comparative advantage.
This was revealed in a presentation submitted to the Senate Standing Committee on Commerce which met with Anusha Rahman in the chair here on Wednesday. The committee also expressed serious reservations over Trade Development Authority of Pakistan (TDAP)’s criteria for selection and allotting stalls in exhibitions held abroad, as it lacks transparency.
Different Trade and Investment Officers (TIOs) of the Ministry of Commerce posted abroad briefed the committee on their core functions, role and achievement.
Pakistan, China agree to explore ways to further enhance trade
A presentation submitted by Commercial Section Pakistan Embassy Beijing noted “notwithstanding the potential and preferential market access in most of Pakistan’s exportable products, our exporters have not effectively penetrated the Chinese market thus far.
Pakistan’ share of exports in the Chinese market is negligible even in the areas where we have a domestic competitive advantage for exports and corresponding demand in China. In the articles of apparel sector, Pakistan’s share in the Chinese market is one percent ($110 million), intermediate textiles 3.5 percent ($839 million), rice, fruits, vegetable and other cereals 1.1 percent ($469 million).
The committee also took the matter of inclusion of certain items in barter trade mechanism.
The Ministry of Foreign Affairs written replied noted that they have no objection from political point of view on the proposed items for barter trade from Iran, Afghanistan and Russia. The US sanctions regime will be triggered/ invoked only if the trade is conducted in US dollars. However, the reply of the primary concerned ministry; i.e., Ministry of National Food Security and Research is still awaited despite issuance of reminder.
Faisal Jahangir Malik, chairman of the Rice Exporters Association, briefed the committee on the potential of barter trade with Iran, asserting that Iran is eager to increase trade with Pakistan. However, he noted that the Pakistani government’s reluctance is a significant barrier. Malik highlighted that up to $5 million could be traded daily through barter with Iran if conditions were improved.
The commerce secretary confirmed that there had been no significant increase in barter trade so far, with the primary issue being that goods must first be imported into Pakistan before they can be exported. He added that Iran has yet to fully accept Pakistan’s conditions on barter trade, and that Iranian businesses face difficulties with payments and subsidies, which are being delayed by Pakistan’s financial institutions.
“Despite these challenges, barter trade has the potential to save Pakistan up to $2 billion annually on petroleum imports,” Malik added.
The meeting also highlighted ongoing financial issues with Iran, including $13 million in payments that Pakistani exporters have had stuck in Iran for several years. The committee discussed the need for better communication between trade officers in Iran and Dubai, and for an alternative system to resolve trade disputes effectively.
“The real issues in trade with Iran lie with the State Bank of Pakistan and the FBR. We need to take a clear stand on this in our next meeting,” said Senator Anusha Rehman.
The commerce secretary said that there were several issues in the SRO related to barter trade as first is B2B arrangement and government was not involved. Secondly, there were restricted items, thirdly sanctioned items verification and fourthly valuation and guarantee. He said a holistic change will be required in the SRO.
The committee decided to constitute a sub-committee, where all stakeholders should set to gather and sort out the pending maters.
The committee was also briefed on Strategic Trade Policy Framework (STPF). Secretary Commerce informed that presently, STPF 2020-25 is in place, which will expire in June 2025. The Ministry of Commerce (MoC) has initiated consultations with the Sectoral Councils and has initially identified pharmaceuticals, chemicals, gemstones, engineering goods, processed food and footwear sectors to prioritise the policy interventions in the upcoming STPF. Furthermore, MoC has also been working with the international development partners to assist in identification of futuristic products in agro food sector; non-textile and non-agro sector, for the mainstream consumer segment in export markets. These new products/ sectors will also be analysed with focus on adopting greening technology to counter any possible compliance related regimes of our major global markets, particularly covering the aspects of climate resilience, circularity and sustainability.
Simultaneously, the MoC has initiated a comprehensive performance assessment of the STPF 2020-25. The assessment will include the factors that have contributed to the success of initiatives envisaged under it, as well as, an analysis of shortcomings accompanied with underlying reasons. This assessment will assist in formulation of the upcoming STPF. A draft of upcoming STPF will be formulated and MoC will share and present the draft with different forums for seeking valuable inputs to further refine it before submitting it to the Cabinet for approval.
The secretary said that National Export Development Board (NEDB) is envisaged under STPF to act as cross functional monitoring and oversight mechanism of the highest level, with the prime minister as its chair. The board comprises senior public and private stakeholders including federal ministers, provincial chief ministers, trade bodies, and sectoral representatives.
Copyright Business Recorder, 2025