Corona virus outbreak: Razak sees no impact on trade with China under FTA-II

ISLAMABAD: The ongoing trade and pace of completing current CPEC projects will not be impacted on account of the corona virus outbreak originating from Wuhan. However, there is a need to look at how the corona virus phenomena develops and it is contained and coped with in the days to come. New interaction on business to business level for fresh trade with Chinese entrepreneurs may be affected but it will also be short-lived as the Chinese are workaholic and will soon be able to overcome the situation emerging out of the corona virus upsurge.

Adviser to Prime Minister on Commerce, Industries & Production, Textile and Investment Abdul Razak Dawood stated this in an exclusive talk with The News here on Sunday, one day before going to Malaysia being part of entourage of Prime Minister Imran Khan.

Under the settled deals keeping in view the Free Trade Agreement Phase-2, he said, the shipment of exports and imports are being carried out and there is no impact on the said transactions. However, he said that fresh face to face interactions with entrepreneurs of both the countries for more trade may be impacted because of the corona virus phenomena. However, in the same breath, he expressed solidarity with China saying that he is quite optimistic that China will soon cope with this menace and normalcy will prevail soon.

To a question, he said that the Textile Policy was almost finalized and will soon be pitched before the cabinet for approval. The policy will not be for three years time, rather it will be for five years.

Dawood said that he agreed that the energy package for textile Industry must be extended for five years. He said that under the energy package, export oriented sectors are extended RLNG at the price of $6.5 per MMBTU and electricity at all inclusive tariff of 7.5 cents per unit.

When his attention was drawn towards the fact that the Power Division has started imposing in new bills to export industry all surcharges, quarterly adjustment tariff and increase in monthly fuel adjustment owing to which per unit tariff has increased to 13 cents from earlier notified 7.5 cents per unit, he said after coming from Malaysia, he will personally take up this issue with Prime Minister Imran Khan as 13 cents per unit tariff to export industry will not help increase the exports of the country, rather it will prove counter-productive.

While mentioning about Pakistan’s endeavors to get hold of extension in the GSP Plus, the adviser said that he recently visited Brussels wherein he held meetings with top officials of the EU Commission but progress on this issue has got delayed on account of Brexit. Now after the exit of the UK from the EU family, the progress in review will appear by end of February or in month of March.

“During my interaction, I found all senior officials of EU Commission very supportive for extending GSP Plus status to Pakistan,” he maintained. He said that he successfully convinced the EU Commission officials and let them know about Pakistan endeavours on progress on four areas of concerns from EU that include a) current status of implementation of labour laws and more importantly on progress about child labour and bonded labour; b) status of Human Rights in Pakistan; c) and transparent process of registration of International NGOs.

The adviser again reiterated that he felt he was able to convince them and in response the EU authorities concerned responded saying they wanted Pakistan to prove progress on the said areas of EU concerns. He said that the EU Commssion will soon recommend to EU parliament for extension of ongoing GSP Plus to Pakistan. However, he admitted the fact that the EU authorities are also being influenced by India, and other competitive economies in the region, but the adviser was optimistic that Pakistan will get extension in the GSP Plus status after the review.

The adviser said that the EU Monitoring Mission will visit Pakistan in April and will hold meeting with officials of various ministries and Attorney General of Pakistan, who is head of Treaty Implementation with EU.

According to the officials of the commerce ministry, the EU approved the GSP Plus status for Pakistan in 2013, but it got operational in 2014. Pakistan’s export to EU stands at $8 billion out of which 56 percent exports are because of the GSP Plus. The official said that Pakistan is facing an ongoing review, which is the last one and after its completion, GSP Plus will be extended till December 2022.

To a question on the emergence of cartelization in Pakistan that all the time makes money by first exporting sugar and then importing it as was earlier done in the case of wheat, the adviser said that he wants to import raw sugar (dark brown sugar) with no duty and taxes which will be converted into refined product by sugar mills. He said that it will lower the price of sugar.

However, he offered no comments when asked about the illegal profit making, first in wheat crisis and now in sugar crisis by some influential people, who are not only part of the cabinet but also have great influence in PM Secretariat.

About the massive decline in exports to Afghanistan, Dawood said he will soon visit Kabul, mentioning that his earlier two scheduled visits to Kabul have already been postponed because of the situation in Kabul.