KARACHI: Federation of Pakistan Chambers of Commerce & Industry (FPCCI) feared that Pakistan would not be able to take advantage of opportunities under Phase II of China Pakistan Free Trade Agreement (CPFTA-II).
Mian Anjum Nisar, President FPCCI and Sheikh Sultan Rehman, Vice President FPCCI said in a statement on Monday expressed fear that Pakistan may not be able to reap benefits under Phase II of China Pakistan Free Trade Agreement (CPFTA-II) despite elimination of duties on 313 tariff lines covering most of Pakistan’s exports.
He pointed out that during Phase I of China Pakistan FTA, the balance of trade remained greatly in favor of China which managed to export 57 percent of its product lines while Pakistan could take advantage of only 5 percent of its product lines.
Pakistan exported US $ 2.1 billion approx. while imports from China have reach more than US $ 17 billion approx. that created trade gap of US $ 15 billion approx. in favor of China.
While products included in this volume of Pakistan’s exports to China are cotton (US $ 872.85 million), Cereals (US $ 161.3 million), Copper (US $150.26), Beverages, spirits and vinegar (US $133 million), Fish, crustaceans, molluscs, aquatics invertebrates (US $ 91.21 million), Ores slag and ash (US $ 66 million), Machinery, boilers (US $45.9 million), Salt, sulphur, earth, stone, plaster, lime and cement ( US $ 43.36 million), Raw hides and skins (other than furskins) and leather ( US $ 35 million, Articles of apparel, knit or crocheted (US 30 million).
FPCCI Office Bearers expressed serious concern about Pakistan’s ability to benefit from Phase II, when Pakistan does not have surplus products to exportdue to a shrinking economy.
He further highlighted the fact that industrial output is declining because of de-industrialization 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.
FPCCI Office Bearers urged Government of Pakistan to urgently develop a robust and holistic industrial policy that would lead to massive industrialization in the country, encourage R&D, innovation, diversification and development of new products, improve quality standards and enhance technical skills of labor.
He also 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.
Otherwise, Pakistan will not be able to receive benefits from supposedly vast opportunities available to us and the fate of Second Phase of China Pakistan FTA will not be any different that the First Phase.