KARACHI: The dollar-strapped Pakistan is now expecting a Business-to-Business (B2B) bartering with neighbouring China to give a boost to its dwindling exports, Federal Commerce Minister Syed Naveed Qamar said on Friday.
Also, he said, Pakistan will continue to enjoy the EU-granted GSP Plus lucrative facility for the next couple of years. The ongoing program, which allows Pakistan to export GSP-eligible products across the EU under preferential tariffs (ie, reduced or zero import duties) was set to expire in 2023.
However, the mister said the EU has not yet given its final decision on what would be the next program’s shape and size. It has extended for Pakistan the facility for at least two years.
It’s time to build B2B ties with China: PM
Pakistan has already met EU conventions and demands including those related to the Human Rights (HR). “We are confident; we will be going into the next program as well,” Naveed said.
Talking to business journalists at Trade Development Authority of Pakistan (TDAP) head office, he said: “The B2B Barter Policy has been approved by the federal cabinet, and we are just going for marketing of the launch.”
The policy has been designed in a manner that it will not ‘annoy anyone,” he said, in a veiled reference to the global powers and financing institutions.
The scheme has been designed primarily focusing on countries like Iran and Afghanistan where the banking systems operations are not so easy due to international sections and other factors. Pakistan can also fetch fruits of this scheme from the Central Asian countries, and Africa where we don’t have banking compatibility with their financial systems.
These countries have a huge trade potential, but we don’t have an easy system for the flow of finances. Compatibility of goods’ value can be a limitation for us. But, we have to work hard on this especially in those countries where we have trade deficit, he said. Barter or trade is defined as the exchange of goods and/or services between businesses, organizations, or individuals without using money to pay for them. The system has been going on for thousands of years now, he said.
“We are expecting barter system with the China,” the minister said. Barter system is an alternate mechanism and other banking transactions will regularly continue, he said.“Sky is the limit,” he said when asked about the barter trade potential, and refused to share any estimated figures.
However the bartering will not be applicable for the countries where Pakistan’s trade is in surplus, like European Union (EU), the United States of America (USA), United Kingdom and, Middles East.
The government has just given a framework. It will be all about consolidation between the two agreeing parties in the system, and recording of imports and exports will be maintained at the customs level, and this will help make settlement between the two parties, the commerce minister said.
China’s eastern province, Shandong is set to relocate its labour-intensive industries to Pakistan to reduce production cost which is part of China Pakistan Economic Corridor. He said the Former President Asif Ali Zardari played key role in implementation of Currency Swap Arrangement (CSA) which gave positive signal to the market on the availability of liquidity of the other country’s currency on the onshore market.
The minister said, China to build an industrial park in Pakistan which will serve as a focal point for all the industrial requirements of Pakistan from China and vice versa. The Federal Minister said projects like solar panels assembly plant, metal refining plants, fertilizer production plant, food processing plants (dry milk production, seafood processing, meat processing) are being considered for future investment.
Copyright Business Recorder, 2023