KARACHI: Pakistan may not get benefit from the 2nd phase of Pak China FTA as Chinese imports of $2 trillion are either of raw materials or high-tech equipment.
“Pakistan does not have the industrial and technical base to produce high-tech equipment such as computers, ICs, telecommunication equipment & automobiles,” Saud Mahmood, Chairman SITE Taxation and Trade Policy, said in a statement on Friday.
Moreover, he said, exports of minerals, live stock and agricultural products is not accelerated by FTAs as importing countries do not apply duties on raw materials.
China is known as the supplier of the world with huge current account surpluses with most trading partners.
After the first phase of PAK China FTA, we had to impose up to 30 percent regulatory duty to save the local industry from closing down.
Even after the imposition of 30 percent regulatory duty, trade deficit from China is over $15 billion with Pakistan exporting under USD 3bn worth of goods to China, mostly minerals, agricultural products, and livestock.
In view of the above ground realities, it would be interesting to see in which areas Ministry of Commerce has envisioned growth of Pakistan’s exports to China.
If exports to China are expected to grow to $6 billion after the 2nd phase of FTA, an item wise break up in which exports are expected to jump should be shared with the industry for their comments.
In the absence of such a detailed effort duly endorsed by leading chambers, it seems that we are all set to shoot ourselves in the foot again.