KARACHI: As the second phase of the Pak-China Free Trade Agreement (FTA) comes into force from January 1, enabling the country to export 1037 products to China on zero duty, Pakistani industrialists are caught in a classic catch-22 situation, saying they will not be able to draw immediate benefits from the arrangement.
Pakistan and China on December 31, 2019, signed the second Sino-Pak FTA which will allow Pakistani manufacturers and traders to export 313 new products on zero duty to China. Pakistan already enjoys export of 724 duty-free products to the Chinese market.
“I had the honor of concluding the agreement for Pakistan in April, 2019, hoping it would help increase our exports substantially,” Sardar Ahmad Nawaz Sukhera, Secretary Commerce, tweeted after signing the agreement.
However, Pakistani industrialists say it will be hard for them to reap the benefits of the deal against the backdrop of the gradual economic slowdown. “They have relaxed 313 items, but our problem is that we don’t have anything to sell because there is not productivity,” Mian Anjum Nisar, newly elected president of the Federation of Pakistan Chambers of Commerce (FPCCI) told Arab News on Thursday. “We have witnessed deindustrialization in the last five years.”
He said that the business community is facing liquidly problems since their refunds remained unpaid while the input cost, including gas, electricity and markup, had multiplied.
Pakistan expects that the production of cotton, which is a basic ingredient for textile goods, would be around 8 million bales this year against the demand of 15 million bales. “Pakistan will have to import around 6 million bales which will have value addition impact of around $6 billion,” Nisar added.
The FPCCI fears that the current situation will result in sick industries due to high input costs, if corrective measures are not taken.
To meet the international demand, industrialists say they will have to increase the production capacity by setting up new industries. “We will not be able to draw immediate benefits from the Pak-China FTA unless we managed to enhance productivity. You need to have something to sell in a market,” the FPCCI president said.
Pakistani industrialists also view the United States-China trade war as an opportunity, though they say they are unable to draw the benefits. “This is a new opportunity as industries in China are moving toward substitution and trade will be diverted to other countries. If we succeed in capturing a portion of that trade, it will increase our exports, though we will require long term planning and infrastructure development,” he added.
The protocol for the second phase of China-Pakistan FTA was signed by both countries during Prime Minister Imran Khan’s visit to Beijing on in April 2019.
“Under Phase-II, Pakistan has secured enhanced and deeper concessions on products of its export interests, revision of safeguards mechanism for protection of the domestic industry, inclusion of the balance of payment clause as a safety valve against balance of payments difficulties, and effective enforcement of the electronic data exchange,” according to the Commerce Ministry.
Pakistan to export 1,037 duty-free products to China
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Pakistan to export 1,037 duty-free products to China
- Local industrialists say they will not benefit from the arrangement immediately due to declining productivity
- Rising costs of gas, electricity and high markups are causing “deindustrialization” in Pakistan, President FPCCI
Pakistan says ‘national security is non-negotiable’ after Afghanistan strikes
- Islamabad says recent cross-border strikes targeted Afghanistan-based militants behind recent attacks
- Kabul has condemned strikes, accused Pakistan of violating territorial sovereignty and killing civilians
ISLAMABAD: Pakistan’s Parliamentary Secretary for Information and Broadcasting Danyal Chaudhry said on Monday “national security is non-negotiable,” defending Islamabad’s recent cross-border strikes inside Afghanistan following a number of recent militant attacks.
The remarks come after Pakistan said it launched “intelligence-based selective targeting” of seven militant camps along the Afghan border in response to a mosque bombing in Islamabad and violence in the northwestern border districts of Bajaur and Bannu, among other attacks. Authorities say many of the assaults have been carried out by the Tehreek-e-Taliban Pakistan (TTP) and allied groups that Islamabad alleges are operating from sanctuaries in Afghanistan, whose government denies this.
Kabul has condemned Sunday’s strikes as a violation of its sovereignty and claimed civilians were killed. Pakistan has not responded to that allegation.
Tensions between the two neighbors have escalated sharply despite a fragile ceasefire agreed after deadly clashes in October.
“Pakistan has always chosen the path of dialogue and peaceful coexistence. But when Afghan soil continues to be used for proxy attacks, we have no choice but to defend our homeland. National security is non-negotiable,” Chaudhry said in a statement.
He said the recent operation had “successfully neutralized militants involved in attacks on Pakistani soil,” adding that “every precaution was taken to protect innocent lives.”
Pakistan has repeatedly accused Afghanistan’s Taliban rulers of allowing TTP militants and fighters linked to the Islamic State Khorasan Province (ISKP), the regional affiliate of the Daesh group, to operate from Afghan territory, claims Kabul denies.
Chaudhry referred to a recent United Nations report, saying militants from 21 countries were now operating from Afghan territory and posed a threat to regional stability.
Afghanistan’s defense ministry earlier condemned what it called a breach of international law and vowed a “measured response at a suitable time.” Its foreign ministry summoned Pakistan’s ambassador over what it described as violations of Afghan airspace.
Islamabad has also accused neighboring India of backing anti-Pakistan militant groups, a charge New Delhi has consistently denied.
The latest exchange has raised concerns of renewed instability along the 2,600-kilometer frontier, where repeated border closures have disrupted trade and strained diplomatic ties. Analysts say the escalation risks undoing recent efforts at de-escalation, including the Saudi-mediated release of three Pakistani soldiers earlier this month.
