MUSHTAQ GHUMMAN

ISLAMABAD: Pakistan and China would discuss ways and means to widen the scope of the still to be agreed Free Trade Agreement (FTA) during the ongoing visit of Chinese Foreign Minister though Beijing had so far not shown any inclination to move forward, well-informed sources told Business Recorder.

Pakistan and China had completed FTA phase 1 in 2012 and the two are presently negotiating the second phase for further trade liberalization.

The sources said Pakistan wants a win-win situation for both countries in the second phase as the outcome of the first phase resulted in a huge trade deficit for Pakistan.

According to sources, Pakistan would reiterate that the Chinese should extend unilateral concessions on priority items of Pakistan to restore the eroded margin of preference which resulted from subsequent FTA’s of China with other countries especially Asean in 2011. Pakistan would also request China to increase rice quota.

The sources further stated that Pakistan would request the Chinese side to extend Electronic Data Exchange (EDE) to the two countries entire trade and not restricted to only trade under FTA as this will help curb the issue of misdeclaration and under-invoicing which is damaging local industry.

Pakistan would also request Chinese side to extend reciprocity in terms of issuance of multiple visas for Pakistani businessmen to facilitate trade.

Recently, China offered Pakistan to commence bilateral trade in Renminbi (yuan) to address the issue of widening trade deficit for which meetings with the State Bank of Pakistan (SBP) have already been held.

The sources quoted Chinese ambassador to Pakistan as saying that China is ready to announce unilateral trade concessions to Pakistan in order to increase its exports to China and reduce the trade deficit. Pakistan was pursuing China for unilateral trade concessions for Pakistan’s interest for the last two years.

CPFTA Part-1 was in favour of China, leading to their exports to Pakistan of more than $ 15 billion against Pakistani exports to China of a mere $1.5 billion last year. The last round of CPFTA-II held in Islamabad remained unsuccessful as both Pakistan and China failed to evolve a consensus on the second phase. A high-level meeting held under the chairmanship of former Prime Minister, Shahid Khaqan Abbasi had decided not to finalize CPFTA-II until industry is taken on board.

Chinese Government is considering inviting the new Prime Minister of Pakistan Imran Khan as a guest of honour for the China Import Fair scheduled in November 2018.

While answering caretaker Commerce Minister’s concern on grant of concession to India and Bangladesh, the ambassador stated that those were announced under the framework of Asia Pacific Trade Agreement (Bangkok Agreement). Jing further stated that CPEC is more focused on energy and infrastructure related projects, however, Chinese government has identified new areas of cooperation and support to the Government of Pakistan through trade promotion, Foreign Direct Investment (FDI) and social sector cooperation.

With regard to Foreign Direct Investment (FDI) the ambassador said that Chinese Government will undertake measures to promote joint venture and investment in SEZs. He suggested that the Shanghai Import Fair would be a good opportunity for Pakistan to show-case its investment potential. Regarding social sector cooperation, the ambassador stated that regional governments of the Xinjiang province and Gilgit Baltistan were working together to improve infrastructure facilities at border posts to address customs and quarantine related issues.