Trade concessions: Islamabad, Beijing have different positions on timing

China and Pakistan are said to have different positions on the timing of trade concessions under second phase of Free Trade Agreement (FTA). On Tuesday, Pakistan's Commerce Minister Pervaiz Malik along with Commerce Secretary Younus Dagha held parlays with the new Chinese Ambassador Yao Jing on trade concessions in FTA-II.
The sources said Pakistan repeated its stance that China should grant unilateral duty concessions on at least 70 items with immediate effect but the Chinese side is not ready to accept this request. Pakistan has also sought similar trade concession whatever is available to ASEAN member countries.
However, addressing a press conference along with Minister for Commerce and Textile Pervaiz Malik and Secretary Commerce, the Chinese ambassador said that his country is ready to extend maximum trade concessions to Pakistan in the second phase of Free Trade Agreement (FTA) on those items which are allowed in the Chinese market keeping in view trade pacts with other countries and regulations.
The Chinese ambassador's signal of more trade concessions for Pakistan came at a time when Pakistan and China are holding the 8th round of talks on FTA-II on February 7, 2018. Pakistani team will be headed by the secretary commerce. He also invited Pakistan to attend a six-day international "Import Expo" scheduled to be held at National Exhibition and Convention Centre, Shanghai, from November 5-10 this year.
He said Pakistan would be the guest of honor in the expo and China also wants to see Pakistan as guest of achievement at the international event. According to the ambassador, the minister for commerce has suggested that export of some Pakistani items like sugar, maize, edibles, vegetables and sea food should be facilitated, adding whatever products are competitive, China would buy from Pakistan. But for the sake of overall trade of balance between China and Pakistan for this year, both countries are going for another round of talks on FTA-II. "I am suggesting to the minister for commerce and ministry that first China would invite Pakistani exporters in China to identify commodities familiar in the Chinese market and in reciprocation Pakistan should invite Chinese exporters in Pakistan to identify potential of their products in Pakistani market," he said.
On relocation of Chinese industry to Pakistan, he said that in the long-term, China would support Pakistan in Special Economic Zones and through joint ventures, which would help increase its capacity to manufacture quality products for export to international market. The ambassador said he has requested for three or four specific suggestions from Pakistani government for relocation of Chinese industry aimed at accommodating Chinese manufacturers immediately.
China and Pakistan are close friends. China definitely is not in a position to have intentional trade imbalance with Pakistan. He said current trade imbalance is the result of specific reasons which include larger scale infrastructure projects and some kinds of machinery from China for CPEC projects but this is temporary phenomena because CPEC will finally improve Pakistan's manufacturing capability and reduce the manufacturing cost of Pakistani products. For the long-term, China believes that Pakistan's exports and manufacturing capability will improve.
"I understand that there are some kinds of concerns from Pakistan's private sector and manufacturers on the FTA. I would say China looks at Pakistan as a special partner and we will never like to hurt your industry through this kind of trade. Basically, our intention is to have more convenient and facilitating mechanism of bilateral trade between the two countries. We want to encourage and facilitate trade with Pakistan and for this purpose would extend whatever facilitation is required," he added.
So, in this regard, the Chinese government could open every door to address Pakistan's concerns whatever, he said, adding that it would not disturb growth of Pakistan's industrial sector at cost, he continued. The ambassador further stated that he has discussed some ideas with the minister for issuance of visas to Pakistani businessmen. He said Chinese Embassy and Counsel General will relax business visas for Pakistani businessmen. He said Pakistani exporters would have better opportunity to explore business avenues in China.
Minister for Commerce Pervaiz Malik said that during discussion with the Chinese ambassador, issues related to export and import have been discussed. He said Pakistan has assured the Chinese ambassador that Pakistan would actively participate in the expo to be held in Shanghai. In this regard TDAP and other concerned organizations have already been issued instructions as this is Pakistan's own expo. The commerce minister said a lot of things have been discussed. All major issues came under discussion because the secretary is undertaking a visit to China to represent Pakistan in the second round of FTA. "Pakistan has taken it as a cut of line and before that we are going to have substantive improvement and understanding on these things," he added.
In reply to a question, the secretary commerce said that the previous round was very positive and issues Pakistan tried to highlight were taken well by the Chinese government. Commerce Minister Pervaiz Malik also held a meeting with his Chinese counterpart on the sideline of WTO Summit in Buenos Aires. It was very encouraging to note that the commitment at the highest level from China was also very positive for useful FTA which would reduce trade deficit and increase the market access to Pakistani businessmen. Pakistan has advantage in textile and some other areas, he said adding if Pakistani gets good tariff reduction like the ASEAN countries, Pakistan industry can benefit from the agreement. Answering to a question on quality of Pakistani products, the Chinese ambassador said that China does not have specific concern or problem about quality of items.
"The problem right now is to identity more commodities with competitive quality and price. The problem is too much shortage of items. China would purchase commodities of $10 trillion in next five years and Pakistan can get its share," he continued.