FTA could increase export by $500 million within 18 months: Abdul Razak Dawood
24 April, 2019
ISLAMABAD: Adviser to PM on Commerce and Textile Abdul Razak Dawood on Tuesday said that under the new list of 313 items included in the second phase of China-Pakistan free trade agreement (FTA), the country’s export earnings could increase by $500 million within a time span of 18 months.
He said the new list is not limited to textile specific products but also includes textile goods, leather, engineering, chemicals, furniture, auto parts, plastic, rubber, paper board, ceramic, glass, surgical instruments, footwear, wood, articles of stones, sea food, meat, tractors, home appliances etc.
The second phase of China-Pakistan FTA is scheduled to be signed in Beijing on April 28 during PM Imran Khan’s official visit of to the country.
Dawood said that Beijing imports around $64 billion worth of these items from across the globe, and if Pakistan is successful in capturing just 10pc of that market share, the country’s exports to China could rise to $6bn.
About China’s export to Pakistan, he said that “we are opening up to 80 per cent of the tariff line over a period of fifteen years, from the existing 35pc.”
Referring to the first phase of Pak-China FTA, which came into effect in 2007, he said that it lacked proper safeguard measures, and now on our request, the Chinese authorities have incorporated those measures in the second phase.
The federal cabinet at its meeting on Tuesday also approved the second phase of FTA which will become operational after the Chinese government completes due diligence.
Almost 95pc of the tariff lines will come under the EDE, covering every item, Dawood explained. In this regard, he appreciated the hard work done by Finance Secretary Muhammad Younus Dagha and his team while serving as commerce secretary.
He said that the real challenge is on both ends — import and export, and the biggest problem is how to reduce imports. Referring to the $15bn trade deficit between Pakistan and China, he said that steps have been taken bring down imports from Beijing and “we have reduced our import [bulk from China] by $3.5bn as compared to previous fiscal year.”
Dawood also showed disappointment with the export figures for March but was hopeful that these would improve in April.
Board of Investment (BOI) Chairman Haroon Sharif told the newsmen that it is not difficult to generate long-term investment interest in Pakistan, and under the FTA, market access is available while companies are also interested.
On foreign investment, he said the BOI would provide around 10,000 acres of land to investors over the next few years. BOI is currently working on the ‘Clean Titled Available Land’ for industrial zoning. Within the existing industrial zones, around 150 acres of land is being made usable, he added.
Sharif said the ‘Board of Approval’ of BOI will hold its meeting in May to consider applications from seven investors. Under the China-Pakistan Economic Corridor economic zones, land for five zones has been prioritised, while land in Rashakai and Dhabejee has been retrieved, land in Islamabad is being searched, however, there has been a delay for the land in Balochistan, he said.
BOI chairman said there are multiple layers of sanctions at federal and provincial levels and all permissions were being merged in a single portal for ease of business. These permissions at multiple levels will have to be removed one day, he commented.
He said that the FDI inflow which was previously directed towards infrastructure is now being diverted towards industrial units.
For the past six months, BOI has received more than 100 applications. Out of these, 22 have already started businesses; twelve of which are in the engineering, electronics, clothing, chemicals and food processing sectors whereas some are currently being incorporated, he said.
Moreover, the BOI chairman added that a Pakistan Business Forum will also be organised on April 28 in Beijing to be addressed by PM Imran Khan.