Pakistan seeks major export boost under new free trade accord with China

ISLAMABAD: Pakistan has decided to seek from China the meaningful implementation of the China-Pakistan Free Trade Agreement (CPFTA-2) for a substantive boost in exports as the objectives of the second trade deal are not being achieved, a senior official privy to the development told The News.

“The China-Pakistan Free Trade Agreement (CPFTA-2) was signed and implemented to increase the exports to China to a reasonable level, as the trade under CPFTA-1, the trade balance was heavily tilted towards China.” Though the exports under CPFTA-2 have increased to some extent, the official said, the objective of the second trade deal is not being achieved. The government wants the Chinese government to ensure more export orders for Pakistan’s entrepreneurs so that the exports to the Chinese market could increase to the maximum potential. “This will be a win-win situation for both countries.”

CPFTA-2 is operational from January 1, 2022, but the latest data for 2021-22 trade volume shows an increment of $23.56 billion, with massive imports of $20.5 billion and exports of just $ 3.06 billion. “Pakistan exports are much less if compared with imports from China.” “So, we are going to place the demand seeking a meaningful implementation of trade deal phase -2 for the JCC (Joint Coordination Committee) meeting to be held soon.”

Pakistan is currently engaged to finalize the JCC agenda under the CPEC umbrella. Pakistan’s exporters are also facing issues like those of phytosanitary barriers in the way of smooth exports to China. “China wants to hold a JCC meeting before November 30, 2022.” To a question, the official said since the Chinese market is a controlled one, Pakistan wants China’s government to play its role in ensuring more export orders for Pakistani entrepreneurs so that country’s exports to China could further improve under CPFTA-2 to a reasonable level.

The official also disclosed that the trade agreement with Indonesia has also caused a massive increase in imports to a large extent and the government is making up its mind to renegotiate the trade deal to ensure a win-win situation. “If we look at bilateral trade data with Indonesia of the last seven years, the trade balance is heavily tilted towards Indonesia in the range of $666 million to $890 million.”