FPCCI fears CPFTA-II may not benefit Pakistan

KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Monday expressed fears that Pakistan might not be able to take advantage of opportunities under Phase II of China Pakistan Free Trade Agreement (CPFTA-II) due to shortage of surplus quantities of exportable goods.

FPCCI President Mian Anjum Nisar said despite elimination of duties on 313 tariff lines covering most of Pakistan’s exports under CPFTA-II, Pakistan might fail to gain much from the agreement.

“During Phase I of China Pakistan FTA, the balance of trade remained greatly in favour of China which managed to export 57 percent of its product lines, while Pakistan could take advantage of only 5.0 percent of its product lines,” he added.

Pakistan exported $2.1 billion worth of goods approximately, while imports from China have reached more than $17 billion approximately, which has created a $15 billion gap in favour of China, the FPCCI statement said.

Giving a list of the exports, the FPCCI said Pakistan exported cotton worth $872.85 million to China, whereas articles of apparel knit or crocheted fetched $30 million. Other products included in this volume of goods being exported to China included cereals ($161.3 million), copper ($150.26 million); beverages, spirits and vinegar ($133 million); fish, crustaceans, molluscs, aquatics invertebrates ($91.21 million); ores slag and ash ($66 million); machinery, boilers ($45.9 million); salt, sulphur, earth, stone, plaster, lime and cement ($43.36 million); and raw hides and skins (other than fur skins) and leather ($35 million).

Nisar urged Chinese companies to enter into joint ventures with Pakistani manufacturers and relocate their industries to Special Economic Zones. “These efforts will significantly raise industrial output enabling Pakistan to take advantage from Phase II of China Pakistan FTA.”

He said industrial output was declining because of de-industrialisation in the last few years. “Serious issues like, high interest rates, frequent increases in power and gas tariff, unavailability of gas to industries, abrupt changes in government policies, rampant smuggling, refunds to exporters and an overall hostile environment are making it difficult for industries to sustain their existence,” it added.

FPCCI urged government of Pakistan to urgently develop a robust and holistic industrial policy that would lead to massive industrialisation in the country, encourage R&D, innovation, diversification and development of new products, improve quality standards and enhance technical skills of labour.

FPCCI office bearers expressed serious concern about Pakistan’s ability to benefit from Phase II, when Pakistan does not have surplus products to export due to a shrinking economy.

They urged the government to urgently develop a robust and holistic industrial policy that would lead to massive industrialisation in the country, encourage R&D, innovation, diversification and development of new products, improve quality standards and enhance technical skills of labour.