A roundtable conference on Pak-China Free Trade Agreement (PCFTA) has recommended to the Pakistan government to be very careful in signing the 2nd phase of said FTA and must include maximum finished goods/items which can be exported to China on tariff line offered by China to ASEAN countries.
The conference was organized by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) that also urged the government to revisit Pakistan-China Free Trade Agreement (PCFTA) and redesign it to promote the economy of Pakistan. It demanded that the concerned stakeholders should be taken on board while framing and finalizing the recommendations on PCFTA.
It stressed that those measures must be taken that balance import and export decreasing the trade deficit. It noted with concern that Pakistan has so far benefited from 1st Round of FTA to the tune of only 4% while China has derived 64% benefit from FTA-I. It alerted that there is an urgent need to convince China to give unilateral concession to Pakistan with tariffs pegged with ASEAN's tariff.
"Pakistan should explore the possibility of signing a trade agreement with all the 10 ASEAN countries separately in case if it is not possible for Pakistan to become a member of ASEAN as India has signed a trade agreement with ASEAN bloc," it recommended.
The roundtable conference asked government to must make effort to stop selling their most valuable gem stones, marble, cotton etc., in raw form and to have an agreement with China so that some process of manufacturing is established in Pakistan for value addition of these items and Pakistani industry is established and improved. It called for agreement with China for transfer of technology to Pakistan. It proposed that Agricultural Research Centre must be established to provide latest biotechnologies for better yield of Pakistan's agri-products.
Speaking on the occasion, FPCCI's sr vice president its Budget Advisory Council chairman Syed Mazhar Ali Nasir said that Pakistan's exports to China even under 2nd phase of Pak-China Free Trade Agreement (PCFTA) would not increase until the tariff line offered by China to Pakistan's competitors Bangladesh, Vietnam and India under ASEAN-China FTA is also made available to Pakistan as it is one of the major reasons that Pakistan's market in China has been eroded away.
SAARC CCI's SVP, Iftikhar Ali Malik, said that while it is possible that changes in tariff are solely responsible for the decline in exports to China, an oft-ignored factor is the overall decline in cotton yarn production that the country faces, since Pakistan's major export item to China was cotton yarn/fabric. He said the unpredictability in supply from Pakistan seems to have been filled-in by Vietnam and India. Secondly, the main export basket reveals that Pakistan was a major exporter of raw materials and semi-finished products to China as, in the first phase of FTA, China did not help to encourage or accelerate export of value added products from Pakistan. He underscored the need of research and development in agricultural sector to increase its per acre yield which is the only way to enhance the capacity and base of Pakistan's exports. He said Pakistan is an agricultural country and we need to increase the quality and quantity of our agri-products such as vegetables, foods, rice, cotton, sugar, etc.
Speakers of the roundtable conference were of the identical view that non-signing of CPFTA-II has provided a sigh of relief to the trade and industry and has helped it to come out of shock and worries about the survival of existing industrial sector of Pakistan and its future development because industrialization is the key to economic self-sufficiency and sustainable development.
They said Pakistan is a developing country and its industrial base is very thin as compared to China, therefore, need of the hour is to protect the industrial growth of Pakistan which is already suffering from multifaceted difficulties for its survival. They noted that since first FTA came into force in November 2006, Pakistan's trade balance with China has worsened considerably although total bilateral trade between both the countries grew exponentially to $19bn in 2015/16 out of which imports from China was $16.5bn and export to China was only $2.5bn showing a trade deficit of $14bn. They said Pakistan's optimal capacity to export is $30 billion which need to be enhanced by facilitating the agricultural and industrial sectors.
The speakers and participants of the conference spoke on PCFTA-II and noted that Pakistan and China began negotiations on the second phase in 2011 and 10 meetings have been held so far, in this regard. They lamented that China was not willing to offer Pakistan substantial market access on items of Islamabad's interest.
The FPCCI roundtable conference on PCFTA was held simultaneously at FPCCI head office in Karachi; zonal office in Lahore and the capital office in Islamabad, through video conference.