ISLAMABAD: The country will have to wait for another two months to reap the possible benefits of duty-free market access along 313 tariff lines to China under the recently-signed second phase of China-Pakistan Free Trade Agreement (CPFTA).
The news came from Adviser to Prime Minister on Commerce and Industries Razak Dawood at a news conference here on Monday.
Dawood said that Pakistan has already approved the revised FTA document but Chinese government will take three to four months for ratification of the agreement. According to him, it is expected to come into effect from July 1.
The adviser cautioned those celebrating the revised FTA with China that things may not work out as per the plan. He said he could expect some fallout on some industries in the post-FTA period.
He also admitted that no market survey was conducted before finalising the list for consideration in the FTA. “My team had held only meetings with representatives of trade bodies and sectors to identify items in close door meetings,” Dawood said, but adding that the ideal situation would have been to conduct a market survey.
Regarding the $1bn additional Chinese market access, he said that so far $300m worth of goods were exported to China this fiscal year. However, he said for the next, it will depend on the revised FTA.
Under the second wave of relocation of Chinese industries, he said Pakistan will try to attract maximum numbers and the current seven special economic zones will be focused. The adviser claimed that two big Chinese investors have visited the country and have shown interest to source exportable goods worth around $1bn from Pakistan.
On currency swap, he said no progress has been made so far. “We will request the new governor State Bank of Pakistan to make progress on the issue,” he said.
The adviser also listed several industries which were protected from the tariff cut under the second phase of duty reduction, which included oil, steel, chemical, rubber shoe. He said that maximum market access is ensured for sectors like textile, leather, engineering products, plastic, furniture, apparels of leather and textile.
The country has successfully brokered revision of Safeguard Measure (SGM), which is invoked to temporally restrict the import of a product which causes injury or threatens to cause it to a domestic industry. He said that in phase I of FTA, SGM was limited to the absolute increase in import, but now it can be invoked on relative increase in imports as well.
Dawood said he could see a better position now to protect injury to any specific industry for a period of six months. However, he said that National Tariff Commission (NTC) needs to be made more effective in protecting the domestic industries against cheap imports.
The adviser admitted that like many other government agencies, NTC is also facing capacity issues which will be improved shortly. On the issue of under invoicing, he said that Chinese government has already started sharing of data at Customs level.
