Experts on Monday called upon the government to build its export capacity to cater the demand of the Chinese markets at competitive pricing, amid finalization of the second phase of Free Trade Agreement (FTA) between Pakistan and China.
“FTA is a silver lining for Pakistan’s economy and great opportunity for both countries.” They were addressing a seminar titled “Pakistan China Free Trade Agreement (FTA): Where we are and where we are going?” was organised by the Sustainable Development Policy Institute (SDPI).
Speaking on the occasion, Minister Counselor, Economic and Commercial Section, Chinese Embassy in Pakistan Dr Wang Zhihua said though trade volume between Pakistan and China has increased over the years, the trading imbalance remained the biggest challenge and concerned by the Pakistani government and the business community.
“The main reason behind the trade imbalance between the two countries was of structural in nature, where China has strong manufacturing base to export goods as compared to import” he said added the finalization of second phase of Free Trade Agreement (FTA) between two countries on the sideline of second Belt and Road Forum will help resolve these issues and strengthen further bilateral trade ties.
Dr Zhihua argued as per phase two FTA, China has agreed to eliminate duties on more than 300 products, especially in the agriculture sector, where Pakistan has the potential to expand its export basket to China. He said China also encourage more business to business interaction activities in China to help Pakistani business community to learn more about Chinese demand and needs. “We hoped that the incumbent government will adopt new industrial policy at the earliest to help improve business environment and ease of doing business”, he said adding it would also help Chinese investors to bring more investments which will also help build manufacturing capacity of the country.
Project Director and Focal Person for CPEC, Hassan Daud Butt said the previous two FTAs could not yield the desired results, hence, pave the way for another revised agreement for the mutual benefit of both Pakistan and China.
“In the previous FTAs between China and Pakistan, there were no safeguard measures for industries, no synergy between relevant institutions, balance of payment vision was not incorporated, and no data exchange policy was agreed to counter under-invoicing issues”, he said added the revised FTA with China has incorporated all these factors to make the commercial relationships beneficial for both countries. He also argued that due to lack of efficiency and relatively lower productivity of human resource, Pakistan was lagging behind in the race of competitiveness as compared to its peer countries in the region and internationally. He stressed the need for enhanced efficiency and urged the business community to initiate joint ventures with the Chinese businesses.
In her opening remarks Dr Hina Aslam, Head of China Study Center, SDPI said even though Pakistan and China had signed two FTAs already — one in 2006 on trade in goods and the other in trade in services in 2009 — but their impact has been less than salutary on Pakistan’s economy.
Executive Director, Pakistan-China Institute, Islamabad Mustafa Hyder Sayed stressed the need for changing mindset when it comes to trade with China. “We always look for concessions, favours and grants, whereas, we failed to developed our own market and industries” he said added the government of Pakistan and business community must fundamentally change the mindset and thinking towards China and other trade destinations. He argued that there is no preparedness on the list of products by our businesses and the government which could compete internationally. “Pakistan needs to improve its regulatory environment and need to ensure the ease of doing business to attract investments”, he added.