China agrees to more trade concessions for Pakistan, says minister

ISLAMABAD: Conceding massive losses to different sectors in the aftermath of signing Free Trade Agreement (FTA) with China, Federal Minister for Commerce Khurram Dastgir Khan said that Beijing had now agreed to provide more trade concessions to Islamabad during the second phase of FTA.
On the issue of Trade and Investment Framework Agreement (TIFA) with the USA in the context of John Kerry’s visit, the minister said that US legislature did not yet authorise Generalised System of Preference (GSP) so there was not much movement on this subject however Islamabad submitted a list of its desired products urging Washington to provide its market access.
“We have agreed to de-link second phase of FTA from phase one which was signed in 2006. China has offered tariff reduction up to 90 percent tariff line of which 70 percent will be made effective with immediate effect and remaining 20 percent in 10 years,” Federal Minister for Commerce Khurram Dastgir Khan said while addressing a news conference here on Tuesday.
Pakistani side, the minister said, offered Chinese side to provide 50 percent reduction in tariff lines. The timeline for providing concessions to Chinese side will require more than 10 to 15 years.
“After conducting in-depth analysis, Pakistani side presented its case before Chinese authorities in an effective manner in which it was agreed that Pakistan would be granted deeper concessions under second phase of FTA,” the minister said.
The minister said that China promised to undertake investment to the tune of $45 billion in Pakistan but there were certain concerns on trade front in the aftermath of FTA signed between the two countries since 2006.
Dwelling upon concerns over FTA, the minister said that Pakistan’s few sectors obtained benefits because of FTA with China but major export earning products could not yield any substantial boost in terms of exports.
“Pakistan’s margin of preference was diluted after Beijing’s FTA with Asean countries,” he said and added that the Federal Board of Revenue (FBR) had also faced revenue loss of Rs22 billion after providing exemptions/concessions to Chinese side on per annum basis during the last eight and a half year period.
The dumping of Chinese products inside Pakistan such as steel products, polyester fibre and chemicals also caused havoc with the local industry, he added.
Pakistani side led by Additional Secretary Robina Ather achieved success in economic diplomacy and convinced Beijing authorities to finalise second phase of FTA on the basis of four basic principles under which both sides agreed to de-link second phase of FTA from phase one. China also agreed that concessions would not be provided to each other on reciprocal basis, the minister said and added that Beijing would provide more trade concessions to Pakistan under the second phase of FTA.
In case of sudden surge in imports, there will be safeguard mechanism by imposing quota restrictions or enhancing regulatory duty under second phase of FTA.In the aftermath of signing FTA with China, the country’s exports went up from $500 million to $2.5 billion while China’s exports increased to $7.5 billion.
The trade figures of both China and Pakistan were also contrary from each other as according to Beijing, its exports to Pakistan increased up to $14 billion.China has also agreed to decrease limit for opening up Pakistani bank branches from $20 billion to $15 billion, said the minister and added that Habib Bank Limited was ready to open up its branch in China while National Bank of Pakistan and United Bank Limited had also shown their interest in this regard.