Government to think FTA matters through: Dastgir

MUSHTAQ GHUMMAN

ISLAMABAD: Commerce Minister Engineer Khurram Dastgir Khan said on Wednesday that Nawaz Sharif government will not sign any Free Trade Agreement (FTA) that does not safeguard the countrys interests.

He made these comments during a press conference convened to announce the notification of category B and category C commitments and launch of Pakistans effective implementation of the WTO Trade Facilitation Agreement (TFA).

When Commerce Minister was asked about reasons for the poor performance of exports and delay in finalization of Free Trade Agreements (FTAs) with Turkey and Thailand and second phase of FTA with China, he said that in the past FTAs were not negotiated properly but incumbent government will first protect countrys interests and then sign the pact.

Commerce Minister acknowledged that Commerce Ministry is facing challenges in exports growth for the last three years but growth in export is also the responsibility of other stakeholders like Ministry of Finance, Ministry of Industries and Production, Ministry of Petroleum, Ministry of Water and Power and Federal Board of Revenue (FBR).

Pakistan is still implementing FTA signed in the past. No agreement will be signed which may hurt Pakistans interests. There is a delay in the finalization of the second phase due to differences of opinion of the two countries. Pakistan will expand trade pact with China when imbalance in trade will be rectified. This year both countries will again hold negotiations on second phase. There is urgency due to CPEC but no change has been made in the pact so far, he added.

In reply to a question, Commerce Minister said that there would be no change in trade regime with India as Pakistan has serious security concerns on opening of Wagha border for Afghan trucks.

Answering another question, Commerce Minister said that Pakistan- Afghanistan border management plan is being formulated and he is hopeful borders will reopen after the ongoing meeting on Afghanistan in London resolves all issues.

Commerce Minister further revealed that his Ministry is also in contact with all the concerned institutions urging them to reopen the border.

Commerce Ministry is of the view that border with Afghanistan should open for trade with heightened security and vetting. There should be a balance between facilitation and regulation, he added.

Khurram Dastgir said he met with a delegation of Pakistan Afghanistan Joint Chamber of Commerce and Industry (PAJCCI) on Tuesday and discussed ways to facilitate trade between the two countries.

We have agreed to resume trade as soon as possible and conveyed to the visiting delegation that sense should also have prevailed on the other side of the border, he added.

According to the Commerce Minister, Pakistan send draft of PTA to Afghanistan a couple of years ago which is still lying with Afghan National Security Advisor.

He said the use of transit trade has declined which is evident from the fact that complaints this year are less compared to previous years. He said Pakistan Railways has been requested to review transport fares for goods destined for Afghanistan.

Replying to a question regarding Iran Pakistan Gas pipeline, he said that issues of international banking for this project are still pending and as soon as this hurdle is crossed, work on this project will start.

In a written brief on implementation of Trade Facilitation Agreement, at various WTO forums it had been pointed out by member countries that red tape in moving goods across borders poses a burden on importers and exporters particularly small and medium-sized enterprises. To address this, WTO Members concluded negotiations on a Trade Facilitation Agreement (TFA) in 2013 at Bali Ministerial Conference.

The TFA contains provisions for expediting the movement, release and clearance of goods. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area. The Agreement will help improve transparency, increase possibilities to participate in global value chains, and reduce the scope for corruption.

OECD has suggested that implementation of the TFA would reduce trade costs by 14.5%. The Peterson Institute estimates that trade facilitation reforms will expand global trade by as much as $ 1 trillion annually. It is estimated that gains from the TFA will accrue mostly to developing countries. Developing countries like Pakistan will also be able to diversify their exports and enter new markets. The Agreement will also help developing countries attract more FDI, increase customs revenues and reduce the incidence of corruption through the availability of all information in a transparent manner. Beyond these quantifiable economic benefits, TFA will improve the systems and customs procedures.

Pakistan ratified the Trade Facilitation Agreement (TFA) in October 2015. The TFA has now come in to force since 22nd February 2017, after two-third members (110) of the WTO ratified the agreement. Commitments under TFA are categorized in three steps: (i) Category-A: already in place/immediately enforceable;(ii) Category-B to be notified immediately and implemented after a transition period and ; Category-C: commitments requiring technical assistance by donors.

Pakistan has already notified its Cat-A commitments-measures that are implementable immediately. Ministry of Commerce and FBR after detailed deliberations have drafted Category Band C measures very carefully.